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Transparency and Corporate Web Sites: IROs' Perspectives in the Wake of the 2001-02 Accounting Scandals

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Transparency and Corporate Web Sites: IROs' Perspectives in the Wake of the 2001-02 Accounting Scandals
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WEVER, NADINE MARIE ( Author, Primary )
Copyright Date:
2008

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Business structures ( jstor )
Corporate communications ( jstor )
Corporate governance ( jstor )
Email ( jstor )
Financial information ( jstor )
Financial investments ( jstor )
Investor relations ( jstor )
Investors ( jstor )
Public relations ( jstor )
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University of Florida
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University of Florida
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Copyright Nadine Marie Wever. Permission granted to the University of Florida to digitize, archive and distribute this item for non-profit research and educational purposes. Any reuse of this item in excess of fair use or other copyright exemptions requires permission of the copyright holder.
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4/30/2009
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656216709 ( OCLC )

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TRANSPARENCY AND CORPOR ATE WEB SITES: IROs’ PERSPECTIVES IN THE WAKE OF THE 2001-02 ACCOUNTING SCANDALS By NADINE MARIE WEBER A THESIS PRESENTED TO THE GRADUATE SCHOOL OF THE UNIVERSITY OF FLOR IDA IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF MASTER OF MASS COMMUNICATION UNIVERSITY OF FLORIDA 2004

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Copyright 2004 by Nadine Marie Weber

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ACKNOWLEDGMENTS I would like to thank my thesis committee chairperson, Dr. Margot Opdycke Lamme, for her support and guidance. Her knowledge and experience in public relations were invaluable. I especially appreciate her confidence in my abilities. I would also like to thank my thesis committee members, Dr. Peg Hall and Dr. Michael Mitrook. Their enthusiasm alone was enough to keep me highly motivated, not to mention their exceptional knowledge and expertise in research and theory. I couldn’t have asked for a better committee! I would like to thank the National Investor Relations Institute (NIRI) for providing a sampling frame. I would especially like to thank the panelists who participated in the study and who shared their expertise and opinions. Finally, I would like to thank my parents, Jim and Lynn Weber; my boyfriend, Morgan; and his parents, Mike and Candy Niznik. They helped me through the most frustrating times whole heartedly with unconditional love and support. I thank them dearly! iii

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TABLE OF CONTENTS page ACKNOWLEDGMENTS.................................................................................................iii ABSTRACT.......................................................................................................................vi CHAPTER 1 INTRODUCTION........................................................................................................1 2 LITERATURE REVIEW.............................................................................................3 Emerging Trend............................................................................................................3 Financial Bomb.............................................................................................................4 Disclosure and the Internet...........................................................................................7 Public Relations Studies........................................................................................8 Investor Relations Studies.....................................................................................8 3 METHODOLOGY.....................................................................................................11 Survey Instrument: The Delphi Technique.................................................................11 Data Collection...........................................................................................................13 4 FINDINGS..................................................................................................................19 Demographics.............................................................................................................19 Results.........................................................................................................................20 Round One...........................................................................................................20 Theme one: defining transparency...............................................................20 Theme two: relationship maintenance..........................................................22 Theme three: obstacles to providing transparency.......................................22 Round Two..........................................................................................................23 Theme one: defining transparency...............................................................23 Theme two: relationship maintenance..........................................................24 Theme three: obstacles to providing transparency.......................................26 Recommendations...............................................................................................28 5 DISCUSSION.............................................................................................................29 Transparency on the Web...........................................................................................29 iv

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Contingency Theory of Accommodation...................................................................31 Limitations..................................................................................................................35 Future Research..........................................................................................................35 6 CONCLUSION...........................................................................................................39 APPENDIX A E-MAIL COVER LETTER........................................................................................41 B INFORMED CONSENT FORM................................................................................42 C E-MAIL BIOGRAPHICAL PROFILE......................................................................44 D E-MAIL PRIMARY QUESTION..............................................................................45 E E-MAIL PRIMARY QUESTION RESPONSE DUE DATE REMINDER..............46 F E-MAIL SECONDARY QUESTIONING.................................................................47 G E-MAIL SECONDARY QUESTIONING RESPONSE DUE DATE REMINDER.48 H E-MAIL FINAL REPORT AND THANK YOU LETTER.......................................49 I PRIMARY QUESTION RESPONSES......................................................................50 J SECONDARY QUESTIONING RESPONSES.........................................................58 LIST OF REFERENCES...................................................................................................68 BIOGRAPHICAL SKETCH.............................................................................................73 v

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Abstract of Thesis Presented to the Graduate School of the University of Florida in Partial Fulfillment of the Requirements for the Degree of Master of Mass Communication TRANSPARENCY AND CORPORATE WEB SITES: IROs’ PERSPECTIVES IN THE WAKE OF THE 2001-02 ACCOUNTING SCANDALS By Nadine Marie Weber May 2004 Chair: Margot Opdycke Lamme Major Department: Public Relations The purpose of my study was to identify how investor relations officers (IROs) are building financial accountability through corporate Web sites. The goal was to provide information that may help investor relations and public relations practitioners build financial accountability on corporate Web sites. A Delphi study (consisting of one initial open-ended primary question followed by an additional round of questioning) was conducted with a panel of experts in the field of investor relations. The intention was to reach consensus among the experts on how to increase the level of transparency of financial disclosures on corporate Web sites. The primary question asked participants to identify how they were building financial accountability on the Web. Based on those responses, subsequent questions were developed to clarify and elaborate. Data were collected and analyzed, using a two-round reiterative process, to determine what factors allow for or hinder the ability of investor relations officers to increase their levels of transparency on their Web sites. vi

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A number of themes emerged: First, no cohesive definition of transparency exists. Second, transparency is not synonymous with full disclosure. Third and lastly, certain organizational obstacles exist that hinder IROs’ abilities to increase the level of transparency they provide on corporate Web sites. It was found that elements of these themes correspond with the contingency theory of accommodation in public relations. Panelists indicate that the ability of IROs to satisfy increased demands for transparency on corporate Web sites is contingent upon numerous factors, some of which correspond with the theory’s 87 variables found to influence the position practitioners take in dealing with a public. vii

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CHAPTER 1 INTRODUCTION The Internet has far-reaching implications for the practice of public relations (Springston, 2001). The ease, cost, and capability of Web sites are stretching and changing the boundaries, roles, and relationships of public relations practitioners inside and outside of their organizations (Springston, 2001). Public relations practitioners must help guide the future of the Internet in ways that are beneficial to the profession, to their clients, and to society (Springston, 2001). To that end, public relations professionals must master and transform the Internet into a tool for enhancing their own efforts rather than an obstacle that makes their jobs even more difficult (Granat, 2002). Although traditionally, corporate communications functions have been rooted in public relations, a new era of co-mingling with investor relations is emerging (“Bridging the Communication Gap,” 2002). Because of the recent accounting scandals, investor relations officers (IROs) and public relations practitioners are now working harder than ever to make sure that messages coming from the corporation are clear, consistent, and unified. Corporate Web sites are a primary tool that practitioners are using to transmit these messages and build financial accountability. Purpose of the Study. The purpose of my study was to identify how investor relations officers are building financial accountability through corporate Web sites. Through a two-wave Delphi study, using a panel of experts in the field of investor relations, data were collected and analyzed to determine what factors allow for or hinder the ability of investor relations officers to increase the level of transparency of financial 1

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2 information on their corporate Web sites. The goal was to contribute an understanding of how investor relations and the issue of transparency relate to public relations; and also to provide information that may help investor relations and public relations practitioners build financial accountability on corporate Web sites.

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CHAPTER 2 LITERATURE REVIEW Emerging Trend A new era is emerging in which public relations and investor relations are co-mingling (“Bridging the Communication Gap,” 2002). For my thesis I use Cutlip’s definition of public relations, “Public relations is the management function that establishes and maintains mutually beneficial relationships between an organization and the public on which its success depends” (Cutlip et al., 2000, p. 6). Investor relations officers (IROs) build and maintain relationships by creating a dialogue with publics who have a significant impact on the financial position of the corporation. According to the National Investor Relations Institute (NIRI), a professional association of corporate officers and investor relations consultants, “Investor relations is a strategic management responsibility using the disciplines of finance, communication and marketing to manage the content and flow of company information to financial and other constituencies to maximize relative valuation” (NIRI:B 2003, para. 1). Furthermore, investor relations includes managing information that materially affects the price of a corporation’s stock, identifying target publics, and educating them about the value and potential of the corporation’s stock (NIRI:B, 2003). Rules for disclosing the financial information that IROs manage are regulated by the Securities and Exchange Commission (SEC). Historically, investor relations was combined with public relations, though investor relations is more finance oriented (“Bridging the Communication Gap,” 2002). 3

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4 Investor relations was created almost 50 years ago for the purpose of communicating with investors and it has been slowly evolving into its own field over the past 30 years (“Convergence of Investor Relations and Corporate Communication,” 2002). The creation of NIRI in 1970 “was evidence of the need for a professional association to establish a code of ethics and means for professional development for those charged with the job of communicating with the investment community” (“Convergence of Investor Relations and Corporate Communication,” 2002, para. 2). Dire market conditions combined with investors’ lack of faith in the credibility of corporate communications is forcing public relations and investor relations to create a more unified message (“Difficult Market Conditions Force IR and PR to Work Together,” 2002). Indeed, there seems to be a surge in the efforts of the public relations function to enhance investor relations by addressing ever-increasing concerns and skepticism that investors are having (“Putting the PR into the IR,” 2002). “With investors as skittish as they are, companies can’t afford to have PR [public relations] department speaking one way about their products or services and have IROs speak in an entirely different manner to investors” (Glaza as quoted in “IR and PR Must Work Together: Consolidated Communications Helps Win Back Investors’ Confidence,” 2002, p. 1). Financial Bomb The skittishness that investors are now feeling toward companies’ disclosures is due to a financial bomb that exploded over two years ago. On October 22, 2001, a complaint was filed alleging that energy company Enron violated the Securities and Exchange Act of 1934 by issuing a series of material misrepresentations (“Securities Class Action Filings,” 2001). As a result of the company failing to write down the value

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5 of its investments in accordance with Generally Accepted Accounting Principles (GAAP), the company’s operating results were materially overstated by its chief financial officer (CFO). In turn, these misrepresentations led to artificial inflation of the company’s stock price. In the end, ex-Enron executives pleaded guilty to felony charges of boosting profits and hiding debts totaling over $1 billion, by improperly using off-the-books partnerships, manipulating the Texas energy market, bribing foreign governments in order to win contracts abroad, and manipulating the California energy market. The company eventually filed Chapter 11 bankruptcy. Arthur Andersen, the company’s auditor and one of the “Big Six” public accounting firms in the United States, was convicted of obstruction of justice for destroying Enron documents. This was just the beginning of a new era of accounting debacles. According to Tom Martin, senior vice president of corporate relations at ITT Industries (a provider of products and services to engineering and manufacturing industries) what followed was “as devastating as the stock market crash of 1929” (Bloom, 2002, p. 14). After Enron, a rapid succession of failures (including WorldCom, Adelphia, and Tyco) prompted a “total meltdown in the trust and confidence” of American business and forcing blue chip companies such as Xerox, Microsoft, and IBM to restate their financial reports (Bloom, 2002, p. 14). But these failures did not simply represent a “crisis of confidence” as former Securities and Exchange Commission (SEC) commissioner Harvey Pitt said (Bloom, 2002, p. 14), they also “triggered the most extensive Congressional legislation, SEC regulations and SRO [self regulation organization] actions that we’ve seen in 70 years” (Thompson, 2002, para. 6).

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6 The SEC established a series of reforms and regulations while Congress passed the Sarbanes-Oxley Act. With the promise of preventing more Wall Street scandals, President George W. Bush signed the Sarbanes-Oxley Act of 2002 on July 30, 2002, calling for “a new ethic of personal responsibility in the business community, an ethic that will increase investor confidence, will make employees proud of their companies, and again, regain the trust of the American people” (Radner, 2002, p. 62). The act passed in the Senate with 100 percent of the vote and in the House of Representatives with a 423-3 margin. The new law impacts certified public accountants; publicly traded companies, including their employees, officers and owners; attorneys; brokers; dealers; investment bankers; and financial analysts. With the laws’ charge to publicly traded companies both public relations and investor relations practitioners are beginning to realize the necessity to co-mingle in order to present a clear, concise, and unified company message (“Difficult Market Conditions Force IR and PR to Work Together,” 2002, p. 4). The legislation seeks to prevent business scandals by revising corporate governance standards; adding new disclosure requirements; creating new federal crimes related to fraud; significantly increasing the criminal penalties for violations of the securities laws; and creating a strong auditor oversight board (Radner, 2002). One goal of the new law is to make management and directors of public companies accountable to shareholders first and foremost, beyond any other corporate initiative, by providing a crucial new checks-and-balances system that affects not only every public company but also pre-IPO (initial public offering) companies; auditors; attorneys; IROs; and finance executives (Sievers, 2003). According to Leane Sievers (2003), vice

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7 president of investor relations at Shelton, a high-tech public relations and investor relations firm, The issue is not about whether it will work, but about how companies will comply with these new regulations and to what extent they will provide this information. Like it or not, corporate governance will become a key component of the investment decision, thereby elevating the role of investor relations in every company. Disclosure and the Internet One area of communications specifically addressed by the SEC concerns the use of the Internet as a strategic tool for increasing the disclosure of corporate financial information. However, such an approach “has resulted in uncertainty about the application of the federal securities laws to these communications” (SEC as cited in “Whose IR Info is on Your Web Site,” 2000, para. 5). Nonetheless, the SEC endorsed the need for technology to play a larger role in the dissemination of corporate disclosures and on February 13, 2002, announced that all corporate Web sites should carry financial reports and disclosures (Dupuy, 2002). By March of 2002, the SEC had required public companies to post “all significant announcements” to their Web sites after fulfilling SEC filing regulations (Dupuy, 2002, para. 1). Never in the history of public relations has there been a vehicle with the capability to communicate any legitimate company message to anyone, anywhere in the world, at any time of the day or night. That is, not until the corporate Web site came along. That makes it the ideal solution, in the SEC’s view, for instant communications with all key audiences of any company shareholders, employees and vendors, (Dupuy, 2002, para. 3). As of December 2002, the number of Internet users surpassed 665 million (“USA Tops 160M Internet Users,” 2002). Despite this enormous audience, there are many practitioners who do not yet use the Internet to its full potential.

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8 Public Relations Studies In a 2000 study on the World Wide Web as a public relations tool, White et al. found that although practitioners believe Web sites are the way of the future, developing and maintaining them is a low priority task. In 2001, Springston found that out of more than 90 percent of public relations practitioners who have access to the Internet, only about 60 percent have organizational Web sites. Additionally, of the organizations in the study that have Web sites, only about 20 percent are designed or programmed by public relations practitioners (Springston, 2001). A 2002 study conducted by the Institute for Public Relations in conjunction with WORLDCOM Public Relations Group, a consortium of over 100 independently owned public relations firms, found that many practitioners whose companies did offer a Web site considered the impact of the Internet on their jobs and relationships to be a positive one and considered information on the Internet to be just as credible as that found in national newspapers, given a reputable source. Investor Relations Studies And, just as public relations practitioners are beginning to recognize the value of the Web, so too are IROs. An October 2002 NIRI study entitled: An Analysis of Trends and Technology in the Practice of Investor Relations, found that investor relations professionals increasingly believe their Web sites provide a significant amount of value to their corporate investor relations programs. Esrock and Leichty (2000) found that the primary audience for corporate Web sites is investors. “The high salience of investors may be due to a combination of factors, such as many investors are online, investors have fairly standard information needs compared to other publics, and the information needs of investors can be served easily

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9 via corporate Web pages” (Esrock and Leichty, 2000, p. 339). In addition, a January 2004 study conducted by Rivel Research Group, a firm specializing in marketing research, in conjunction with Corporate Communications Broadcast Network (CCBN), a leading provider of Web-based solutions for the investment community, found that “In today’s investment environment, the IR website [sic] has become a mission critical application, not only for regulatory compliance but for meeting the information needs of investors” (Radner as quoted in “Portfolio Managers Cite Web-Based Communications as Crucial Component of Investor Relations,” 2004, para. 3). Furthermore, the study found that “investors rely heavily on Web-based communications to help them make informed investment decisions” (Radner as quoted in “Portfolio Managers Cite Web-Based Communications as Crucial Component of Investor Relations,” 2004, para. 3). It has also been observed that “the Internet has, in effect, put the public back into public relations” (Bergen as stated in Diorio, 2002, para. 1). Although public relations and investor relations practitioners seem to agree that the Web provides great potential, it is still unclear how the Internet is being used, particularly to meet the new demands for transparency imposed by investors and regulators. In December 2002, APCO Worldwide, a global public affairs and strategic communications firm, conducted a study that looked at online corporate transparency and found that several key elements as dictated by regulation were lacking, including the “CEO/CFO Sarbanes Oxley certifications, descriptions of corporate governance committees and charters, and providing summaries of the professional experience of Board of Director members” (“Survey Finds Vast Disparity in Online Transparency,” 2003, para. 4). However, it also found that organizations tended to focus on elements of

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10 accessibility, such as ease-of-use and aesthetic appeal. Although these “can have a dramatic and positive impact on intangibles, such as corporate reputation, trust and brand image” (“Sites Unsound,” 2003, para. 11), this emphasis implies more concern with the access of the information than the quality of the information itself. These kinds of inconsistencies related to transparency not only have affected ways in which Web sites are employed as a corporate communications tool, but also how the investor relations function itself is perceived. Additionally, managers are relying on investor relations “to restore investor trust and drive shareholder value,” to increase “visibility among investors,” and through interdisciplinary teams composed of IR [investor relations], CFOs, and legal counsel “to determine what needs to be communicated” (McCartney, 2003, para. 1). Thus, this study asks, In the face of increased demands for transparency, how are IROs building financial accountability through their organization’s Web sites?

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CHAPTER 3 METHODOLOGY Survey Instrument: The Delphi Technique Because little is known about the relatively new concepts of transparency, financial disclosure and the role of corporate Web sites in transmitting those messages, the Delphi research method was used to investigate these ideas, to determine implications for the future, and obtain input from experts (Vercic, 2001; “Delphi Technique: A,” 2003). The premise of the method is that through rounds of questioning, panelists would provide iterative responses that will either “converge” or “show a clear and reasoned dichotomy” (Vercic, 2001, p. 374). The Delphi technique was developed by Helmer and associates in the 1950s at the RAND Corporation as a means of aggregating the perceptions of a number of experts to improve the quality of decision making toward an emerging trend (“Delphi Technique: A,” 2003). Since then it has been used in over 1,000 published research projects (McKenna, 1994). Between 1975 and 1994, more than 463 papers and publications employed the Delphi methodology, with a growing number of current applications in the private and public sectors, in fields such as: technology, economics, education, health-care, manufacturing, food, energy, and engineering, among others (Gupta and Clarke, 1996). The Delphi method has a number of advantages. First, according to a study conducted by the Regional Center for Vocational and Technical Education and Training (RCVTET) a Southeast Asian human resource development provider, the design of the Delphi method optimizes input from individuals in a group while minimizing the 11

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12 problems encountered in face-to-face group interaction (“Using Delphi Technique in Assessing Needs for VTET,” 2004). Second, it allows the researcher the opportunity to involve experts from a wide geographic area who cannot come together physically (Wakefield, 2000; “Delphi Technique: A,” 2003). Third, it allows the researcher to conduct timely and cost efficient research (Linstone, 1975; “Delphi Technique B,” 1994; “Using Delphi Technique in Assessing Needs for VTET,” 2004). Additionally, it utilizes individual written responses by a group of experts and, through e-mail, lends itself well to the electronic environment (Dunham, 1996; Wakefield, 2000; Vercic, 2001; “Delphi Technique: A,” 2003). Through e-mail, as little as five days is needed between waves of questioning at no cost. Also important to note is that the Delphi technique can be either quantitative or qualitative. In this study, it will be employed qualitatively, and data analysis will consist of listening to the responses, deciding which ones should be included, and how they should be stitched together (Daymon and Holloway, 2002). Furthermore, as a researcher, it is also a matter of explaining those responses “by putting your own meaning on the data” and comparing it with the conclusions of other researchers to arrive at an assessment of what the findings mean in relation to appropriate knowledge (Daymon and Holloway, 2002, p. 239). Additionally, qualitative research is well suited for studying public relations because it deals with complex human processes that are always changing (Lesly, 1986). The Delphi method also has a few limitations. First, criteria for the identification and selection of expert participants have not yet been established (Bramwell and Hykawy, 1999). Therefore, for the purposes of this study, parameters have been set up as

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13 guidelines for who qualifies as an expert. Also, a group as diverse as possible was chosen in order to minimize bias due to non-random selection of participants (“Using Delphi Technique in Assessing Needs for VTET,” 2004). Second, the e-mail may not be read or responded to quickly enough, if at all (“Delphi Technique: A,” 2003). Therefore, a commitment to participation was retrieved prior to questioning (See Appendix B: Informed Consent Form). Third, especially high participant motivation is needed since other people are not present to provide stimulation and motivation (“Delphi Technique: A,” 2003). Hence, an e-mail reminder was sent to the panelists to remind them of when their responses were due (See Appendix E: E-Mail Primary Response Due Date Reminder and Appendix G: E-Mail Secondary Questioning Response Due Date Reminder). Data Collection First, a purposively selected sample was identified. The ideal panel size of a Delphi study has not yet been identified by researchers (Hamoen, 1998; Bowles, 1999; Kreber, 2001). Clayton (1997) suggests that a small panel of five to ten individuals is suitable. Dalkey and Helmer (1963), the founders of the Delphi method, used a panel of seven experts in their original Delphi experiment. Other Delphi studies have utilized panels ranging from as few as six panelists to more than 40 (“Use of Expert Panels in Developing Land Use Forecasts,” 2004). “Unlike survey research, which insists on a random sample that represents all parts of a population, a Delphi study carefully selects individuals who have knowledge necessary to analyze a specific problem” (Nehiley, 2004, para. 1). The panelists for this study were experts or specialists in the field of investor relations and were members of NIRI. An initial contact was made with a member of the

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14 NIRI Board of Directors. This contact led to the solicitation of five possible participants. When the solicitation of these initial five participants failed, an employee at NIRI suggested the use of the “chapter leaders” lists on NIRI’s Web site to find possible participants. The panelists were chosen from member lists of over 130 NIRI chapter leaders nationwide. From these lists, an e-mail invitation was sent out to possible panelists (Appendix A). Selection criteria included: current membership in NIRI, at least five years experience in investor relations, and employment for an organization that utilizes a corporate Web site for the purposes of investor relations communication. These criteria ensured that the panelists were qualified experts. Through the e-mail solicitation, a sample of thirteen was obtained who fit the sample parameters. Of these thirteen panelists, two had to drop out due to work and family emergencies and two no longer responded to e-mail, leaving a final panel size of nine members. However, this is justifiable on the grounds that each panelist contributed a distinct perspective while at the same time shared similar expertise in the field of investor relations. The panel then, while small, conformed to Kreber (2001), by consisting of a group of carefully selected individuals with special knowledge; in this case, investor relations. The panelists were then asked to respond to two biographical profile questions (Appendix C). These questions were designed to flesh out the background of each panelist to enrich the context and credence of their responses. The questions were as follows: “How many years of experience do you have in investor relations? Briefly describe the roles you have fulfilled, including your current position.” And, “have you ever worked in public relations? If so, how many years? Briefly describe.” Table 1,

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15 shows the job title, years of experience in investor relations, experience in public relations, and geographical location of the panelists. Next, the initial survey instrument was prepared and distributed. During the preparation of the primary question in a Delphi study, researchers develop an open-ended probe to determine initial opinions and themes that will be addressed in the second round (Hasson, Keeney, and McKenna, 2000; Vercic, 2001; Nehiley, 2004). The open-ended probe for this study was: In the face of increased demands for transparency, how are you building financial accountability through your organization’s Web site and/or your clients’ Web sites? (Appendix D). After the first question was distributed, the panelists were allowed up to two weeks to respond. Once all responses were received the data were analyzed (Appendix I). The analysis of the responses consisted of searching for prevalent themes and patterns, and interpreting underlying meanings. A coding procedure, called the constant comparative method of qualitative analysis, originally developed by Glaser and Strauss (1967), was used, in which single statements were frequently read over and slowly combined into encompassing categories. Unique, exceptional, or different statements were included to help protect against the fallacy of over generalizing the data (van Zoonen, 1994). Main themes and supporting evidence were sought out (Wrigley, 2002). Findings were explained in themes, and illustrated through direct quotations from the panelists (Walker, 2000; White, 2000; Aldoory, 2001; McKinnon, Tedesco, & Lauder, 2001; Wrigley, 2002). The results of the data analysis of the first question then determined the next wave of questions, which were more precise and sought to clarify responses to the primary

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16 question (“Delphi Technique: B,” 1994; Dunham, 1996; Hasson, Keeney, and McKenna, 2000; Wakefield, 2000; Vercic, 2000; “Delphi Technique: A,” 2003; and Nehiley, 2004) (Appendix F). Panelists were e-mailed an attachment that included all of the panelists’ responses to the primary question, and they were asked three follow-up questions to clarify ideas and elaborate on concepts suggested during the first wave: What does transparency mean, then? Is it another term for regulatory compliance or does it go beyond that? Could too much disclosure be a detriment to this relationship [the relationship between IROs and their investors]? If so, where should the line be drawn? How can these obstacles [budget limitations, conflicts with the IT department, time constraints, the need to conform to a template, and objections from legal counsel] be overcome? After distribution of the second wave, another week was allowed for responses. Once the second wave of responses was received the data were analyzed (Appendix J). One panelist did not return a response to the second round due to illness. This second wave was analyzed by interpreting underlying meanings, and looking for supporting evidence of the three themes that were found in round one. The same coding procedure was used as in round one. Findings were again explained in themes, and illustrated through direct quotations from the panelists (Walker, 2000; White, 2000; Aldoory, 2001; McKinnon, Tedesco, & Lauder, 2001; Wrigley, 2002). Panelists were then e-mailed an attachment including all of the panelists’ responses to the second round of questioning and were informed that a final report would be sent to them. The last step in the process was to prepare and distribute the final report to all panel members (Appendix H).

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17 Trustworthiness and Authenticity. When the Delphi technique is used as a qualitative method, two criteria, trustworthiness and authenticity, are used to assess the research process (Daymon and Holloway, 2002). Trustworthiness refers to an assessment of the entire research process that seeks to find out the extent to which the research has taken multiple accounts of social reality into consideration, the ability of the study to provide readers with the possibility of applying findings where appropriate, and the degree to which all stages of the research process are transparent and open to questioning (Bryman, 2001). Furthermore, trustworthiness seeks to answer the question “How can an inquirer persuade his or her audiences (including self) that the findings of an inquiry are worth paying attention to, worth taking account of” (Guba and Lincoln, 1985, p. 290). This study is trustworthy because it has taken into consideration multiple accounts, from nine credible panelists, of the current state of transparency on corporate Web sites. It has provided the field with insight into the emerging trend of providing transparency on corporate Web sites, thus allowing IROs to apply findings where appropriate. Furthermore, this study is trustworthy because it answers the question of why transparency is worth paying attention to. Authenticity is the degree to which the research fairly represents different viewpoints from the panelists’ field; the degree to which the research helps the panelists to better understand their own environment; the degree to which the research helps panelists to understand the perspectives of other panelists; and the degree to which the research acts as impetus for social action (Bryman, 2001; Daymon and Holloway, 2002).

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18 This study is authentic because it fairly represents the viewpoints of the nine panelists by allowing for confidential responses. Furthermore, at each stage, participants were informed of the process and after each round, were exposed to all of the panelists’ responses, allowing them to better understand the perceptions of the other expert panelists. Table 1: Biographical Profile Responses Panelist Number Job Title Years of Experience in Investor Relations Experience in Public Relations Location Gender 1 President (Firm) 15 Yes South F 2 Managing Director of Investor Relations (Firm) 15 No North-West M 3 Corporate Communications Supervisor 8 Yes West F 4 Vice President of Investor Relations 17 Yes North-East F 5 Director of Investor Relations 10 No West M 6 Director of Investor Relations & Corporate Communication 31 Yes South-East M 7 Director of Investor Relations 16 No North-East F 8 Senior Vice President (Firm) 13 Yes West M 9 Vice President of Investor Relations and Corporate Communication 6 No South-East F

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CHAPTER 4 FINDINGS Demographics Of the 9 panelists, 5 were female and 4 were male. The panelists came from a broad range of cities from across the United States: 3 from the West, 1 from the North-West, 2 from the South-East, 1 from the South, and 2 from the North-East. The panelists’ investor relations experience ranged from 6 to 31 years. Five of the 9 panelists are experienced in public relations. Of those, 3 have prior work experience with public relations firms and 2 work in organizations that combine public relations with investor relations. This notion of co-mingling will be discussed in further detail in Chapter 5. The 4 panelists with no public relations experience, state that they understand public relations and report conducting public relations-type activities in their current role, such as writing press releases, arranging media tours, and developing and maintaining a rapport with financial media. Three of the 9 panelists work for investor relations consultancy firms, 5 work for corporations, and 1 works for a private company. All are in upper management positions (Table 1). The panelists describe themselves as having the following investor relations roles: strategic planning, accounting, managing, marketing, consulting, interfacing with investors, reviewing SEC filings, analyzing quarterly results, maintaining relationships with financial news media, creating and implementing disclosure policies, establishing investor Web pages, and writing annual reports. 19

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20 Results Round One In response to the first question, “In the face of increased demands for transparency, how are you building financial accountability through your organization’s Web site and/or your clients’ Web sites?” the panelists identify three broad themes that described how IROs are, or ought to be, building financial accountability through their corporate Web sites: The quality of financial disclosure is just as important as the quantity of and access to it. Transparency on corporate Web sites helps to maintain the relationship between a company and its investors. IROs must overcome obstacles in order to increase the level of transparency on their corporate Web sites. Theme one: defining transparency An analysis of the comments related to the first theme reveals some discrepancies concerning the quality and quantity of transparency on corporate Web sites. One perspective concerns how corporate Web sites are a reliable tool for building financial accountability by providing investors with an array of key financial information. Panelist #7: the company’s investor relations website [sic] is a primary source of information for investors. Panelist #9: Our website [sic] is used as a tool to provide greater transparency and accountability to the investment community. Panelist #3: Personally, as an IRO, I believe it is our job to educate the investment public as much as possible on the company, its people and its financial status. A corporate web site [sic] is the easiest and most cost effective way to disseminate this information. Panelist #5: our company is extremely forthcoming with disclosing a consistent set of financial metrics in our earnings press releases—quarter after quarter. And these metrics are, of course, included in our press releases located on our website [sic]. So investors know right where to turn to find this information quickly.

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21 This view is shared even by an IRO from a small private company who recognizes the importance of providing transparency through corporate Web sites. Panelist #3: we have made an effort to act like a public company and have issued and posted press releases on our web site [sic] detailing top line financials (i.e. revenues, operating expenses, cash, etc.). If and when we become a public company, I plan to implement company fundamentals and financialsas well as a corporate governance section that will include board composition, board committee charters and guidelines. The other perspective, however, concerns the content and how the quality of financial information is just as important as quantity and access. Panelist #1: most companies are ensuring that they are complying with new requirements—rather than being proactive about providing additional transparency. They are including the governance information, the “whistle blower” site, as well as the standard financial statements and disclosures (news releases), but have not greatly increased the quantity or quality of the information beyond that. the focus of transparency has been on written documents that are then filed with the SEC, rather than made more readily available through more intuitive and user-friendly media that the Internet can deliver. Panelist #2: companies should make access to all publicly filed documents as easy as possible for anyone, anywhere. The assertion is that all investors, regardless of sophistication levels or capitalization, should be able to see, read, or obtain a copy of the same information. The Internet has enabled companies to satisfy this more moderate definition of transparency. many investors today say that the ease of navigation they experience on a company’s website [sic] is one of the first criteria they use to assess the level of transparency endorsed by a company. I think it’s important here to stress that a good IR website [sic] does not guarantee the achievement of transparency if the documents accessed through the site are so poorly or vaguely worded that they are confusing or purposefully misleading. The Internet is simply a tool with which investors can today gain easy access to documents. It is no guarantee that the documents themselves are worthwhile. Panelist #8: I know it’s not what everyone wants to hear, but I don’t think this [increased transparency through corporate Web sites] is really happening. The increased demands for transparency are not driving or even being considered by the people who work on web sites [sic]. I cannot recall anyone asking in the past two years to look at their web site [sic]. With respect to transparency, the focus of everything that’s interesting has been the SEC filings. Of course, these are filed on the web [sic], but that’s not exactly a web site [sic] program, now is it?

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22 Finally, another panelist observes that companies are more motivated to increase the level and quality of transparency on their corporate Web sites when they are faced with a crisis. Panelist #8: [Regarding a company that has been charged with corrupt practices and is still under investigation]: Our intent is to tell the company’s story in advance of a crisis hitting—and, when people start to notice the company, the corporate spokesperson will point to the web site [sic] and say, “see, we’ve been saying all along that this is a problem, and look at what we’re doing to make sure this never happens again to us and our people.” Theme two: relationship maintenance The second theme panelists describe is that IROs believe transparency on corporate Web sites is a good way to maintain a relationship with investors. Some panelists state that the disclosure of financial information on corporate Web sites benefits that relationship by building financial accountability. Panelist #2: transparencycan help to establish a valuable level of trust and credibility between management and investors. Panelist #6: through the Investor Relations page on the Company siteinterested persons have easy access to all SEC filings, as well as the replays of past web casts [sic], historic press releases and virtually any other financial information that they may want. Panelist #7: We pay close attention to and measure the effectiveness of our online communications. We believe shareholder confidence is paramount. Panelist #3: Personally, as an IRO, I believe it is our job to educate the investment public as much as possible on the company, its people and its financial status. A corporate web site [sic] is the easiest and most cost effective way to disseminate this information. Theme three: obstacles to providing transparency The third theme is that some IROs must overcome certain obstacles in order to increase the level of transparency on their corporate Web sites, specifically, budget limitations; time constraints; conflicts with IT department; habits of using the same template to maintain the Web site; and objections from legal counsel.

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23 Panelist #8: budget limitations have essentially put the web site [sic] team in a “maintenance” mode (in other words, there’s no money for improvements). Panelist #8: In one case, in particular, where we’ve tried repeatedly to improve the quality of the offering on the web site [sic], we’ve been frustrated by two forces: first, the client moves like a snail, its committees impede action and in any case it’s hard to get them to do much of anything that’s different from what they did yesterday. Panelist #8: The web sites [sic] are driven by a bunch of IT technicians and communications functionaries. They are simply executing on orders that have been in place for a number of years. In many cases, the hard thinking is done by outside firms-CCBN is one-that set up templates that each company individualizes (and, if something isn’t in the template, it’s not on the web site [sic]—meanwhile, everyone has a “corporate profile” on their web site [sic] because that’s in the template). Panelist #3: Of course, you are always having to find a happy medium with the lawyers, who believe that the less information you post the better. Panelist #1: Some companies are publishing their recent investor presentations as well as maintaining archived webcasts [sic]. However, these actions are often done over the objections of legal counsel who warn of dire consequences. Panelist #9: The SEC wants such information left up for one year but our legal council suggests 60 days. Round Two In round two of questioning, the survey group was asked to clarify and elaborate on the three themes found in round one. Three secondary questions were asked. Theme one: defining transparency Because the responses to the primary question included discrepancies about the meaning of transparency, the first secondary question asked, “What does transparency mean, then? Is it another term for regulatory compliance or does it go beyond that?” Most panelists state that transparency begins with regulatory compliance but should encompass more than that. Panelist #1: transparency is comprised of four elements. First, access to information. Second, the quantity of information. Third, the quality of information. And fourth, the information must be timely. Looking at it from “the other side of the glass,” i.e., the investor’s viewpoint, the investor wants to know, and feels he is entitled to know, what the company knows, when the company knows it.

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24 Panelist #2: Transparency is a state of mind, a corporate value, a code of conduct. It is not an absolute concept, (present or not present), but rather exists along a continuum. What the SEC, NYSE, NASDAQ, and other regulatory bodies are trying to define are minimum standards of transparency that all companies should meet. Corporate managements and Boards of Directors reveal a great deal about their own character by how much they resist or embrace the defined minimums and to what degree and on what issues they go beyond the minimum. Panelist #4: Transparency is defined somewhat by the regulatory agencies but should go beyond their definition. It is an effort to, in a clear and substantive manner, provide the owners of a public company with the necessary information that they require so that they can make accurate investment decisions. After all, the real “bosses” of a public company are the investors. Panelist #5: Transparency meansproviding the information to investors in an easy to find manner. Panelist #6: In a nut shell it [transparency] is the company opening itself to full and unfettered review at all levels. It is operating in an honest and ethical manner. Panelist #7: The kind of information provided to the investment community and how it is made available define corporate transparency. Components of transparency include financial disclosure, timeliness of the disclosure and audit quality of financial disclosure. I believe transparency is an extension of regulations, whose goal is to ensure companies provide the investment community with sufficient information to make an investment decision. Panelist #8: What “transparency” ought to mean, in the practice of investor relations, is the presentation of information that enables readers to understand and clearly see the key elements of a company’s economic position and business plan so they can make reasonable assessments of the enterprise’s future outlook. Transparency does not mean “full disclosure.” Transparency also does not mean, necessarily, being responsive to investors. And, finally, transparency does not, necessarily, mean giving detailed forecasts of future coming quarters. Transparency ought to go beyond regulatory compliance. Panelist #9: Transparency means providing investors with both insight into the financial statements and insight into the manner in which a company is run. In today’s business environment of corporate scandals, investors also want further transparency into how a company is run. Transparency is providing investors with a look “inside” the business—to provide them with an understanding of how the business makes money—both actually and ethically. Theme two: relationship maintenance Responses to the primary question support the notion that disclosure of financial information through corporate Web sites benefits the relationship between a company and its investors by building financial accountability. Therefore, to elaborate on this theme, the second secondary question asked, “Could too much disclosure be a detriment

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25 to this relationship? If so, where should the line be drawn?” Most panelists state that too much disclosure can be detrimental to the IRO-Investor relationship. Panelist #1: In any relationship, too much information can be detrimental. Panelist #2: I suppose “too much” disclosure could occur if (1) competitive information was revealed, leaving the company vulnerable to rivals’ reactions, or (2) so much minutia was disclosed that investors were unable to discern the primary financial drivers of the company. Panelist #4: Yes! A company has to function in the most efficient and beneficial (for the long-term) manner possible. There is an old saying about “too many cooks in the kitchen spoiling the broth.” To a certain extent this is the same. Panelist #5: I definitely think disclosure on a corporate web site [sic] benefits the relationship between the investor and the Company. Panelist #7: Yes too much disclosure may be a detriment. The IR team in conjunction with the CEO, COO and CFO, decide what metrics and information will be disclosedis it important in evaluating our business model? We strive to provide the investment community with the necessary information to evaluate the strength of our business model and from time to time we may add to the level of our current disclosure. Panelist #8: on to the question of too much disclosure. This can be a real issue-but there’s a fine line to walk. Panelist #9: It is a matter of determining what is the appropriate disclosure to provide insight into the business for investors. Furthermore, panelists state that a line should be drawn before too much disclosure either clouds informed investors’ decision making, confuses uninformed investors, or poses a competitive or business risk to the company. Panelist #1: Where the line is drawn in the investor/company relationship is, and will continue to be, an ongoing struggle. That line has shifted to “what an average investor would want to know when making an investment decision.” It was gone from an objective measurement to a purely subjective one. Panelist #2: Investors want to have shared with them enough information on which to make an informed investment decision, but not so much that the company weakens its competitive advantage. Panelist #4: Some information should not be disclosed because it either 1) poses a competitive or other business risk to the organization and/or 2) would raise issues and create angst with shareholders who do not have the skills and/or in some instances comprehension to understand the disclosure appropriately. Companies need to decide what information is appropriate to disclose and what is not, to maintain their business and competitive performance. Panelist #5: the goal should not be to disclose everything possible, but rather to disclose the type of information that best aids investor decision making.

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26 Panelist #6: If any line is drawn it would be in the area of the possible impact of pending legal action, which may or may not be decided for or against the organization, and could cause individuals to react negatively based on mere innuendo. Panelist #7: A clearly defined line must be established by the company regarding the level of information it will disclose. More importantly, the company must discuss its results in the terms of the metricsthey need to be in the proper context. Panelist #8: but there’s a fine line to walk. Obviously, hiding stuff is against the law. Obviously, a 3,600 page 10K obscures the real questions. Here are two examples of the dangers created by either excessive or unclear disclosure: large numbers of data pointscan fuel volatility and make stock’s price more risky and therefore less valuable; companies can create barriers to entry for some investors with disclosures that have either too much detail or that lack relevant facts. Panelist #9: A company must be careful in determining what financial and non-financial information will be the most beneficial to investors and what information the company will be consistently comfortable disclosing. For example, some information may be detrimental from a competitive standpoint and therefore a company may not want to disclose. Some information may not be predictable and therefore may cause uncertainty in the investment community if it could not be reliably forecasted. Theme three: obstacles to providing transparency Responses to the primary question reported that some investor relations officers confront obstacles such as budget limitations, conflicts with the IT department, time constraints, the need to conform to a template, and objections from legal counsel. Therefore, the third secondary question asked, “How can these obstacles be overcome?” Most panelists state that obstacles could be overcome if the IRO enlists the help of senior management. Panelist #1: Until senior management of a company embraces the fact that corporate IR websites [sic] are the most effective and efficient tool of meeting their disclosure obligation, those objections will continue to rise. Management should, but often doesn’t, understand that the Web presence is a TOOL. Management, not the IT department or the webmaster [sic], will be held accountable by shareholders for the CONTENT and accessibility of the information on the site. Panelist #6: if management understands the value of providing a transparent image and all concerned management members take the time to work together, then the challenges can be dealt with in a manner that makes everyone a winner. It just requires that senior management buy into the concept and fully support and direct the necessary actions to make it work.

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27 Other panelists state that obstacles could be overcome if all pertinent publics are educated about and understand the needs of one another. Panelist #7: One way in which you can overcome these obstacles is to ensure all stakeholders understand the importance of having a well-branded and organized website [sic]. Additionally, I have been able to demonstrate to each stakeholder the benefits of having a website [sic] what’s in it for them. Panelist #9: I have found that there is a two-way education process that needs to take place so that both sides understand the needs of the other. With regard to conflicts with legal counsel, many panelists state that communicating with the legal department and educating them on the needs of investors can help them understand what disclosures are necessary. Panelist #9: Regarding objections from legal counsel, it is hard to find a balance between the attorneys’ need for conservatism and the pragmatic needs of communicating with the investment community. I have found that there is a two-way education process that needs to take place so that both sides understand the needs of the other. And, by providing the attorneys with insight into why we want to disclose certain information, they usually will come around. Panelist #2: Objections of legal counsel can often, but not always, be overcome by presenting examples of other companies’ practices that conform to, or are more similar to, the desired practice. Some panelists state that resource limitations, such as time constraints, budget limitations, and conflicts with the IT department could be overcome. Panelist #9: I have found that if I’ve wanted to do things that deviated slightly fromtemplatesI have my webmaster create a new page. On resource limitations, since it is content that is equally, if not more, important in driving transparency and, thus, financial accountability with the investment community, IROs should be able to come up with solutions that provide the information on the web [sic] to investors, even if it is not in the most appealing format. But, having a few pages developed and then information in the form of word documents or pdfs [sic] posted to them in a timely manner should not be an overwhelming obstacle. Panelist #2: The other obstacles (budget, IT, time) seem rather weak excuses to me in regards to minimum disclosure/transparency guidelines. If IR is running into those obstacles, the issue needs to be escalated to senior management and senior management needs to support IR, thereby reinforcing the company’s Transparency Values. Beyond the minimum disclosure requirements, budget and time constraints are a fact of corporate life. IR practitioners need to be able to prioritize their wish list and know how to negotiate toward compromises on the most important.

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28 Panelist #5: Time constraints are the fact of life in our profession (IR). I strongly believe IR folks need to outsource the IR website [sic]. Recommendations An analysis of panelists’ responses revealed a set of 8 recommendations or guidelines IROs should keep in mind when faced with obstacles to building financial accountability on their corporate Web sites: 1. Maintain a gentle and diplomatic persistence toward obstacles 2. Prioritize obstacles and negotiate toward compromises 3. Inform senior management of all obstacles and enlist their support 4. Make sure that all stakeholders understand the importance of a well organized Web site 5. Demonstrate to stakeholders the benefits of having a Web site 6. Educate both legal counsel and investors of each others’ needs 7. Provide insight to legal counsel about why certain information ought to be disclosed 8. Try to come up with solutions, even if they are not the most appealing aesthetically; content is more important than aesthetic appeal

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CHAPTER 5 DISCUSSION This study began with the question: “In the face of increased demands for transparency, how are you building financial accountability on your corporate Web site and/or your clients’ Web sites?” In essence, responses from the panel of experts indicate that no cohesive definition of transparency exists; that transparency is not synonymous with full disclosure; that certain organizational obstacles exist that hinder IROs abilities to increase the level of transparency they provide on corporate Web sites; but nonetheless, corporate Web sites are an appropriate tool for increasing the level of transparency of financial disclosures. Additionally, certain factors emerged that parallel elements of the contingency theory of accommodation. Transparency on the Web For IROs to increase transparency on their corporate Web sites they must first understand what makes disclosures transparent enough for investors’ increased demands to be satisfied. Therefore, the first secondary question, based on a theme that emerged from the first round, asked panelists to define transparency. According to panelist #8, “Transparency has emerged as one of those slang words that, well, needs a more transparent definition. The great thing about a word that is ill defined is that everyone can be in favor of it. I, for one, love only motherhood more than transparency.” In general, panelists indicate that transparency is more than regulatory compliance, and that regulatory bodies such as the SEC, NYSE, and NASDAQ define only the minimum standards of transparency that IROs should meet. Moreover, some panelists consider 29

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30 transparency to be a two-way concept, providing investors with a way to look inside the business in order to understand how the company maintains its financial position. Also based on a theme that emerged from the first round, panelists were asked in round two whether or not too much disclosure could be a detriment to the IRO-Investor relationship and if so, where the line should be drawn. They indicate that regardless of any increased demands for transparency, IROs are still advocates for their organizations and so they do not want to allow too much disclosure that could leave the company vulnerable to the reactions of rivals. Furthermore, they do not want to confuse investors, leading them to misinterpret primary financial information, or raise issues and create angst with less informed investors, of which could be detrimental to the IRO-Investor relationship. During the first round, panelists indicate that certain organizational obstacles may hinder their abilities to provide an increased level of transparency on their corporate Web site. As a result, in round two, panelists were asked how organizational obstacles could be overcome. Some panelists indicate that obstacles such as budget limitations and time constraints are just a part of corporate life and being a publicly owned company brings with it certain costs. Furthermore, some panelists indicate that budget limitations and time constraints are weak excuses and since the content of disclosures is what is most important, IROs should be able to come up with timely and cost effective solutions that aren’t focused on bells and whistles. Both the literature and the results of this study indicate that IROs may be placing too much emphasis on the aesthetic appeal of their Web sites at the cost of providing insufficient content. Panelists do indicate that obstacles could be overcome if all stakeholders including senior management, the IT

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31 department, legal counsel, and investors, are educated on the needs of the others and, are given the opportunity to understand the importance of having a well organized Web site by communicating to them its benefits. As one panelist notes, however, not all investors will rely on corporate sites. Panelist #8: most institutional investors own dozens if not hundreds of stocks, and efficiency alone dictates they get their financial information from a limited number of sources, probably third-party sources, and that this data be viewed in a consistent format (hence, portfolio decision makers are most likely to be looking not at corporate web [sic] sites, each of which is unique-they are most likely to rely on downloads from Bloomberg, for example, or presentations by their analysts). Nevertheless, prevalent throughout most panelists’ responses in both rounds of this study is the theme that corporate Web sites have the potential to satisfy investors’ demands for increased transparency by increasing accountability to the investment community, establishing a valuable level of trust and credibility, and promoting shareholder confidence. Contingency Theory of Accommodation During the initial stage of contacting panelists, one of the biographical profile questions asked if the panelists had any experience in public relations. Panelists indicate that practitioners’ roles in investor relations encompass many public relations-type activities. Furthermore, both the literature and panelists’ responses to this study indicate that due to the recent accounting scandals, investor relations and public relations are co-mingling in order to transmit clear, consistent, and unified company messages. It is not surprising, then, to find elements of public relations principles emerging from the panelist comments; in fact, some parallel the public relations contingency theory of accommodation.

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32 The contingency theory of accommodation presents an alternative to Grunig’s excellence theory, which suggests that the ideal model of public relations is based on two-way symmetrical communication (J. Grunig and L. Grunig, 1992, p. 285). The contingency theory of accommodation argues that “true excellence in public relations may result from picking the appropriate point along the continuum” that balances both the current needs of the organization and its publics (Cameron, Cropp, and Reber, 2000, p. 244), providing “a more accurate model of how public relations is practiced” (Cancel, Mitrook, Cameron, 1999, p. 172). “The perspective of the organization and the perspective of the involved publics are better measured by points on a continuum rather than only one or the other strictly symmetrical or strictly asymmetrical views” (S.A. Hellweg as quoted in Cancel, Mitrook, and Cameron, 1999, 172). This continuum ranges from pure advocacy to pure accommodation with a balanced or mixed motive stance in the middle. The theory offers many factors that “affect whether more accommodation or more advocacy will be effective in achieving departmental and organizational objectives in the short and long term” (Cancel, Mitrook, Cameron, 1999, p. 173). “Many variables are taken into account as practitioners determine a stance towards a given public at a given time” (Cameron, Cropp, and Reber, 2000, p. 245). Corresponding Parallels A few themes from this study parallel the contingency theory of accommodation. Panelists indicate that the ability of IROs to satisfy increased demands for transparency on corporate Web sites is contingent upon numerous factors, some of which correspond to the theory’s 87 variables that influence the positions companies take in dealing with its publics.

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33 External variables One variable concerns the complexity of an issue. That is, how difficult an issue is to understand will influence the ways in which public relations practitioners decide to communicate that issue to selected publics. In this study, many panelists identify factors that could influence the complexity of an issue, ultimately affecting the way they would communicate that issue to their key publics: how IROs define transparency, the extent to which they value and support it, the extent to which they embrace minimum standards of it, and the extent to which they feel comfortable disclosing financial information consistently. Another contingency variable concerns the “richness or leanness of resources” (Cancel, Cameron, Shallot, & Mitrook, 1997, p. 60) in the industry environment. That is, the degree to which public relations efforts can complement existing resources will determine the degree to which practitioners will communicate to selected publics. Similarly, panelists in this study indicate that the ability of IROs to satisfy increased demands for transparency depends on their ability to provide timely, accessible, and quality financial information on corporate Web sites. Thus, for example, a general lack of quality financial disclosures (leanness of resources) coupled with investors’ demands for increased transparency could influence IROs to become more proactive in finding ways to provide timely, accessible, and quality financial disclosures. Internal variables From an internal perspective, the contingency theory variable of advocacy describes practitioner interactions and those of their organizations with their external publics (Cancel, Mitrook, & Cameron, 1999). In this study, panelists indicate that IROs are still advocates for their organizations, and they do not want to allow too much

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34 disclosure that could leave the company vulnerable to the reactions of rivals—regardless of the demands of the external publics for more transparency. Additionally, the personal ethics variable of contingency theory corresponds to this study’s findings, as well. Some panelists indicate that the level of transparency on corporate Web sites provided by IROs depends on the character and ethics of the company, implying that the ethics of each practitioner in aggregate make up the ethics of the company as a whole. Another internal variable identified in contingency theory concerns the amount of funding available and the amount of time allowed to practitioners for dealing with the public. In general, these variables constitute a broader theme regarding practitioner access to the dominant coalition because it is the dominant coalition that has “the final decision power on how much time, money, and staff resources” practitioners may expend in dealing with the public (Cancel, Mitrook, and Cameron, 1999, p. 179). In this study, some panelists indicate that the level of transparency on corporate Web sites provided by IROs depends on the level of value senior management places on the investor relations function, the resources senior management provides to IROs, and the obstacles IROs still have to overcome to provide an increased level of transparency on their corporate Web sites. In addition, panelists indicate that a lack of resources, such as budget limitations and time constraints, hinders the ability of IROs to increase the level of transparency on their corporate Web sites. Echoing the contingency theory variable concerning influence from the corporation’s legal department, some panelists indicate that objections from legal counsel

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35 can hinder IROs’ abilities to increase the level of transparency on corporate Web sites, impeding their interaction with investors. Although the contingency theory of accommodation does not directly address Web-based communication, the results of this study suggest emerging principles regarding communication on Web sites. Limitations One limitation of this study is that due to design and time constraints, a third wave of questioning was not conducted. This could have taken the form of a quantitative survey which could have helped to identify other variables that correspond with contingency theory and/or helped to strengthen existing connections found. It also could have helped to develop consensus among the panelists concerning the definition of transparency. Another limitation concerned the unavoidable dropout of three participants due to due to work and family related emergencies. The loss of their comments could have further enhanced the findings. Future Research This study focuses on how IROs are building financial accountability on their corporate Web sites. As a result, many questions arise that are valuable for future research. First, no cohesive definition of transparency was identified by the panelists. To avoid influencing the panelists’ responses, no initial definition of transparency was given to them. However, one of the goals of the primary question was to see if a cohesive definition of transparency already exists. It does not. Further exploration of the ways in

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36 which IROs define transparency could provide a better understanding of what constitutes disclosure and where the line should be drawn between too little and too much disclosure. Second, although one of the objectives of a Delphi study is to address implications for the future, this study was unable to do so as a result of the lack of a cohesive definition of the present state of transparency on corporate Web sites. Further exploration of the present state of transparency on corporate Web sites could provide predictions for its implications in the future. Third, further exploration of the similarities and differences in the perspectives of IROs and public relations practitioners could provide a better understanding of the emerging trend of co-mingling. Fourth, exploring the level of value that senior managers place on investor relations and how that compares to public relations could provide a better understanding of the resources senior managers are willing to provide to IROs in order to develop and maintain a corporate Web site for the purposes of enhancing financial accountability. Furthermore, future research exploring the gender of IROs and how that compares to public relations practitioners could provide a better understanding of the organizational culture. Fifth, this study focuses on the use of corporate Web sites to build financial accountability as a result of increased demands for transparency. However, exploring the ways in which corporate Web sites can be used during specific instances of the life of a corporation, such as the initial public offering or crises, could provide better insight into the magnitude and potential of the corporate Web site to transmit company messages.

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37 Sixth, this study looks only at publicly-traded corporations. However, as one panelist mentions, privately owned companies are also finding Web sites to be a viable tool in increasing the transparency of financial information. Therefore, exploring how non-publicly traded companies perceive the Internet as a tool for building and maintaining financial accountability could provide a better understand of the far reaching impact the Internet has on all organizations. Seventh, this study looks at the use of corporate Web sites from the perspective of IROs. Further research of how other publics, such as investors, use them could provide a better understanding of the effectiveness of using Web sites to transmit company messages. Eighth, this study provides a foundation from which future research could be conducted in order to test the contingency theory of accommodation. Further exploration of the factors that the panelists identify in this study could provide a better understanding of the theory’s 87 variables that influence the position practitioners take in dealing with a public. Additionally, researchers could investigate whether there are relevant variables that were not mentioned by the panelists. Using the labels assigned by Cancel, Cameron, et al. (1997), these variables might include threats (potentially damaging publicity, further governmental regulation, scarring of the company’s reputation, and legitimizing activists’ claims); number of competitors and level of competition; the credibility and power of the investors; media coverage on investors; and the past success or failure of investors to trigger reform. Additionally, several internal variables as labeled by Cancel, Cameron, et al. (1997) could be explored as well, such as corporate characteristics (economic stability of the company and the company’s past experiences in dealing with

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38 investors); internal threats (economic loss or gain, marring of employees’ or stockholders’ perception of the company, and marring of the personal reputations of the company decision makers); and relationship characteristics (the level of trust between the company and investors). Lastly, exploring the contingency theory of accommodation with regard to two-way symmetrical communication through corporate Web sites could provide a better understanding of Web-based communication.

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CHAPTER 6 CONCLUSION This study attempts to bring attention to how investor relations practitioners are building financial accountability on corporate Web sites, a subject which has been previously neglected by researchers. Based on this study, scholars and practitioners can better understand and explore how IROs are responding to the needs and opportunities for Web based transparency. Previous research has focused on trends in the role of IROs, practitioner access to the Internet, design and programming of Web sites, impact of the Internet on practitioners, and Web site audiences. Few studies have been conducted on the elements of transparency on corporate Web sites. Of those that have been conducted, results show that transparency is lacking but few explanations or prescriptions have been provided. This study impacts the field of public relations by exploring how IROs are meeting the increased demands for transparency in the wake of the 2001-02 corporate accounting scandals by using corporate Web sites to build and maintain financial accountability. In this study, a number of themes emerge that illustrate how IROs are building financial accountability on corporate Web sites. First, no cohesive definition of transparency exists. Second, transparency is not synonymous with full disclosure. Third and lastly, certain organizational obstacles exist that hinder IROs abilities to increase the level of transparency they provide on corporate Web sites. Findings also reveal correlations with the contingency theory of accommodation. Panelists indicate that the ability of IROs to satisfy increased demands for transparency 39

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40 on corporate Web sites is contingent upon numerous factors that correlate with some of the theory’s 87 variables found to influence the position practitioners take in dealing with publics. Dire market conditions resulting from a rash of corporate accounting scandals have caused investors to question the financial accountability of many companies. Both the literature and panelists of this study indicate that by satisfying investors’ demands for increased transparency on corporate Web sites, IROs are also building financial accountability. As a result, public relations and investor relations are co-mingling in order to transmit clear, consistent, and unified company messages. Going forward, panelists’ responses indicate that corporate Web sites are an appropriate tool for increasing transparency and given time will continue to emerge even further as a primary communications tool.

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APPENDIX A E-MAIL COVER LETTER Dear <> <>: I am a master's student in public relations at the University of Florida and am conducting a thesis research project about investor relations and transparency. Sue Nunn, SVP Member Services and Chapter Development, suggested that some members of the NIRI chapter leadership might be interested in participating, which is why I am writing you. You would be joining a group that includes some members of the NIRI Board of Directors, who were referred to me by Don Allen, Partner at the Allen Group and a member of the NIRI Board of Directors. The study, based on the Delphi technique, would be sent to you via email and consists of two parts, both of which will be sent to all participants: an initial open-ended question (estimated response time of 15-20 minutes) followed by a question based on the collective responses to the first question (20-30 minutes). Prior to the study, each participant will be asked a short series of questions to establish a professional profile (5 minutes). Please be assured that *total* participation time won't require more than 45 minutes to an hour, spread over a period of 3-4 weeks. The identity of the respondents will remain confidential. And, of course, upon completion of the project, I would be happy to share my results with you. Although I am in the process of recruiting participants, you should receive the first question in the next two weeks (and then have two additional weeks to respond). To indicate your participation, please sign the attached consent form and fax it to my research supervisor, Dr. Margot Opdycke Lamme, at (352) 392-3952. If you are unable to open the attachment, or if you have any questions please feel free to e-mail me at nadine6866@hotmail.com or call me at (352) 373-7093. Thank you for your time and consideration. Sincerely, Nadine Weber 41

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APPENDIX B INFORMED CONSENT FORM Informed Consent Protocol Title: Communicating Transparency through Corporate Web Sites. Please read this consent document carefully before you decide to participate in this study. Purpose of the research study: The purpose of this study is to explore investor relations practitioners' definitions of transparency and to see how those definitions of transparency are transmitted to investors through corporate Web sites. What you will be asked to do in the study: You will be asked to reply to an initial primary research question via e-mail. After your reply to this question a subsequent set of questions, based on the collective responses to this primary question, will be sent to you. After reply to this set, a final analysis of all participants' answers will be compiled and sent to you for your final thoughts. Time required: As much time as you need, there is no time limit for answering questions. However, the reply e-mail should be sent back within two weeks. Confidentiality: Your identity will be kept confidential to the extent provided by law. Your information will be assigned a code number. The list connecting your name to this number will be kept in a locked file in my faculty supervisor's office. When the study is completed and the data have been analyzed, the list will be destroyed. Your name will not be used in any report. Voluntary Participation: Your participation in this study is completely voluntary. There is no penalty for not participating. There are no potential risks or benefits for participating. Right to withdraw from the study: You have the right to withdraw from the study at anytime without consequences. Whom to contact if you have questions about the study: Nadine Weber, Master's Student, Department of Public Relations, 352-373-7093, nadine6866@hotmail.com ; Dr. Margot Opdyke Lamme, Study Supervisor, Department of Public Relations, 352-392-0449, mlamme@jou.ufl.edu Whom to contact about your rights as a research participant in the study: UFRIB Office, Box 112250, University of Florida, Gainesville, FL 32611-2250; 352-392-0000 42

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43 Agreement: I have read the procedure described above. I voluntarily agree to participate in the procedure and I have received a copy of this description. Participant:______________________________________ Date:______________ Principal Investigator:______________________________ Date:______________ Please Fax to: Dr. Margot Opdycke Lamme, (352) 392-3952

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APPENDIX C E-MAIL BIOGRAPHICAL PROFILE Dear <> <>: Thank you for willing to be a participant in my study. Before I send you the initial question, I would like to create a biographical profile of you. This information will be confidential. The purpose of this information is for me to show the credibility of my participants in my data analysis. Please e-mail your responses to these questions as soon as possible. 1. How many years of experience do you have in investor relations? Briefly describe the roles you have fulfilled, including your current position. 2. Have you ever worked in public relations? If so, how many years. Briefly describe. I will e-mail the initial question to you in the next few days. Thank you for your time. Sincerely, Nadine Weber 44

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APPENDIX D E-MAIL PRIMARY QUESTION Dear <> <>: Thank you for your responses to the biographical profile. The primary question of my study is as follows: In the face of increased demands for transparency, how are you building financial accountability through your organization's Web site and/or your clients' Web sites? Feel free to answer this question using any and all expertise and knowledge you have attained throughout your career in investor relations and/or public relations, not just your current organization. There is no minimum or maximum length required. Please send your response via e-mail no later than Thursday, February 12th . Once all responses are collected, a compilation of them will be e-mailed to you for further comment. Thank you for your time. Sincerely, Nadine Weber nadine6866@hotmail.com 45

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APPENDIX E E-MAIL PRIMARY QUESTION RESPONSE DUE DATE REMINDER Dear <> <>: This is just a reminder that your response to my primary question is due this Thursday (at any time). There are currently 13 panelists. When all 13 responses are collected, I will send a copy of them to you for further comment. To ensure anonymity, no names, including the names of any organizations, will be given out at any time. If you need another copy of the primary question or if you have any questions for me regarding any part of this study please e-mail me or call me at 352-373-7093. Thank you, Nadine 46

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APPENDIX F E-MAIL SECONDARY QUESTIONING Dear <> <>: Thank you for your response to my primary question. Attached to this e-mail is a copy of all of the eight panelists’ responses. Please review the responses and answer the following additional questions. If necessary, you may also include any clarifications to your first response. Again, there is no minimum or maximum length required. Please send your response via e-mail to nadine6866@hotmail.com no later than Tuesday, February, 24 th . Once all secondary responses are collected, a final report will be e-mailed to you. 1. The majority of panelists stated that corporate Web sites can build financial accountability by providing investors with access to key financial information. Others wrote that Web sites can build financial accountability by transmitting a level of transparency beyond that which is mandated by the SEC. However, other panelists argue that the quality of financial information is just as important as access to it. What does transparency mean, then? Is it another term for regulatory compliance or does it go beyond that? 2. Some panelists stated that the disclosure of financial information on corporate Web sites benefits the relationship between a company and its investors by building financial accountability. Could too much disclosure be a detriment to this relationship? If so, where should the line be drawn? 3. Despite the wide agreement among the panelists that corporate Web sites are a good tool for building financial accountability, some reported that they confronted obstacles, such as budget limitations, conflicts with the IT department, time constraints, the need to conform to a template, and objections from legal counsel. How can these obstacles be overcome? Thank you for your time. Sincerely, Nadine Weber nadine6866@hotmail.com 47

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APPENDIX G E-MAIL SECONDARY QUESTIONING RESPONSE DUE DATE REMINDER Dear <> <>: This is just a reminder that your response to my secondary round of questions is due this Tuesday (at any time). There are currently 9 panelists. When all 9 responses are collected, I will send a final copy to you. The 9th panelist's response is attached to this e-mail. If you would like, please look over this additional response. If you need another copy of the secondary questions or if you have any questions for me regarding any part of this study please e-mail me or call me at 352-373-7093. Thank you, Nadine 48

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APPENDIX H E-MAIL FINAL REPORT AND THANK YOU LETTER Dear <> <>: I would like to thank you for participating in my study. Your knowledge and expertise provided educational and enlightening insights into the concept of transparency and the role of corporate Web sites. I hope that you found the experience to be a valuable use of your time. It has been a pleasure working with you. As promised, a final report, detailing the results of the study, is attached for your reference. This report contains segments of my thesis that I thought you would find most interesting. If you would like a complete copy of my thesis please let me know and I will provide you with one as soon as my thesis committee signs off on it. Once again, I greatly appreciated your participation and highly valued your opinions. Thank you, Sincerely, Nadine Weber 49

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APPENDIX I PRIMARY QUESTION RESPONSES Primary Question: In the face of increased demands for transparency, how are you building financial accountability through your organization's Web site and/or your clients' Web sites? Panelist #1: Frankly, what I'm finding, both within my client base and others in the local area, is that most companies are ensuring that they are complying with the new requirements -rather than being proactive about providing additional transparency. They are including the governance information, the "whistle-blower" site, as well as the standard financial statements and disclosures (news releases), but have not greatly increased the quantity or the quality of the information beyond that. Some companies are publishing their recent investor presentations as well as maintaining archived webcasts. However, these actions are often done over the objections of legal counsel who warn of dire consequences if this information is not kept current. Because of the legal implications involved, the focus on transparency has been on the written documents that are then filed with the SEC, rather than made more readily available through the more intuitive and user-friendly media that the Internet can deliver. Panelist #2: To answer that question, I think it’s important to begin by defining what I interpret “Transparency” to mean. Extreme advocates of increased transparency define it in ways similar to public access laws, which dictate when and to what degree records of proceedings of public/governmental entities must be made available to anyone seeking them and that allow members of the general public and media to attend and report on discussions among the leaders of the public entity as they occur. This is obviously an extreme version of the concept and one that we are, thankfully, far from approaching in regards to corporate activities. However, one can’t ignore the trend toward an attitude of entitlement, motivated by a general distrust and voyeuristic curiosity, on the part of investors and media desiring to know more about how corporations conduct their affairs and make decisions. This is especially the case when it comes to areas of corporate governance, executive compensation, insider trading and related-party transactions, all areas in which investors presume there are more likely to be “unsavory, unethical shenanigans” present. The more moderate definition of “Transparency”, and the one to which I generally subscribe, suggests that companies should make access to all publicly filed documents as easy as possible for anyone, anywhere. The assertion is that all investors, regardless of sophistication levels or 50

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51 capitalization, should be able to see, read, or obtain a copy of the same information. It’s then up to them to understand and interpret the information in making their investment decision. The Internet has enabled companies to satisfy this more moderate definition of transparency. Conversely, investors’ understanding of the Internet’s capabilities has also created the expectation that companies can, and therefore should, use the Internet to provide this level of access. Thus, many investors today say that the ease of navigation they experience on a company’s website is one of the first criteria they use to assess the level of transparency endorsed by a company. Sites that seem thinly populated with information or make it unnecessarily difficult to drill down to basic information will discourage investors from further research and investment in that company’s stock. Conversely, sites that offer up all the most commonly sought-after documents in an easy-to-navigate fashion succeed in drawing investors in and establishing an initial level of trust that is more likely to lead to eventual investment. This is the test to which we put our clients’ websites as we counsel them on content and navigation. The link to the investor relations portion of the site should be easy to find on the home page. Upon arrival at the IR site, the various content sections should be clearly visible and accessible with one additional click. I think it’s important here to stress that a good IR website does not guarantee the achievement of transparency if the documents accessed through the site are so poorly or vaguely worded that they are confusing or purposefully misleading. The Internet is simply a tool with which investors can today gain easy access to documents. It is no guarantee that the documents themselves are worthwhile. A company must still place great emphasis on writing their disclosures in such a way that an investor will easily understand how the company makes its money. That’s where good investor relations proves its value again and again. Whether an investor obtains the information from the IR website, from a mailed “investor kit”, or through one of the many financial portals, the company’s story, strategy, prospects and risks must be clearly articulated. We regularly counsel our clients on how to make their sites more user-friendly, how to incorporate content required under new regulations, and whether to use one of the outsourced IR site-hosting services available. But we spend far more time, by a factor of 10 to 1, making sure their press releases, SEC filings, press clippings, corporate fact sheets, etc., etc., present a fair representation of what business the company is in and what company, competitor and macro-economic dynamics are likely to impact the company in the future. It is not the company’s job to try and convince every investor to buy its stock. I believe it’s the company’s job to “frame up” the investment proposition for investors – to educate

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52 the reader on the key variables that are likely to determine the company’s degree of financial success over the next 12-18 months and to encourage the reader to follow those variables using whatever additional external and internal sources they have available in order to anticipate their effect on the future earnings of the company. Good transparency acknowledges that some of the key dynamics to which a company is subject may, indeed, move against it, causing lower than expected profitability. Good transparency does not pretend to be able to remove those risks, it seeks to ensure that any investor who does a reasonable amount of research will be well-informed about the existence of those risks. It then becomes the investor’s job to decide whether or not they believe those variables will move in the company’s favor or against it and to make their investment decision – long, short or no position – accordingly. No amount of transparency will ever reduce or eliminate natural business risk. But transparency, achieved with or without the use of the Internet, can help to establish a valuable level of trust and credibility between management and investors. Panelist #3: Currently, I represent a small, private, [name deleted for confidentiality] company with low visibility and little resources. Since we are not public, we are not required to publicize our financial status or accounting practices. However, we have made an effort to act like a public company and have issued and posted press releases on our web site detailing top line financials (i.e. revenues, operating expenses, cash, etc). We have listed the names and biographies of our executive management team and board of directors so that the investment community is aware of who is behind the operations of our company. With the new Sarbanes Oxley Act, there are many new requirements that a public companies must meet in order to be incompliance with the SEC, most of which relates to financial accountability such as GAAP accounting and corporate governance. If and when we become a public company, I plan to implement company fundamentals and financials, which is made easy with the use of service providers like CCBN and shareholder.com, as well as a corporate governance section that will include board composition, board committee charters and guidelines. I gained experience in development of corporate governance web sites at my previous employment on the agency side. Personally, as an IRO, I believe it is our job to educate the investment public as much as possible on the company, its people and its financial status. A corporate web site is the easiest and most cost effective way to disseminate this information. Of course, you are always having to find a happy medium with the lawyers, who believe that the less information you post the better! Panelist #4: I have always considered that [company name deleted for confidentiality] has been on the cutting-edge of using technology to enhance visibility for and provide increased access to the company's information. This is especially important to [company name deleted for confidentiality] as, until recently, we consisted of 3-4 tracking stocks, and thus absolute transparency was critical for investors to believe in us.

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53 For approximately 7 years now, we have webcast our annual shareholders' meeting, and for the past 5 years we have webcast our annual Analyst Day event. Access to this information has enabled our shareholders, who may be unable to travel to the live event, to participate real-time just as if they were there. Materials are provided for them as well. In addition, we provide the standard news releases, IR events, and other "normal" IR items on our web page. One relatively new addition to the web site has been a corporate governance page. This page is under construction (currently that information resides on our general information page). We expect to enhance the existing information when it is transferred to the new corporate governance page. This should become live within the next several months. Panelist #5: I actually have a meeting next week to ensure that we remain in full compliance with new Sarbanes Oxley disclosure requirements. We also webcast virtually every investor conference on our webpage, and announce them beforehand at least two days prior to the event. I also archive quarterly conference call webcasts indefinitely and make them available in an archived portion of our website. Over the past year or so, I have also begun to use a slide presentation as part of our quarterly eanings conference call webcasts. The slides complement our prepared remarks. I think these slides have proven a very effective way to communicate our results, while improving disclosure and transparency as well. We have, for many years, listed our financial guidance in our financial press releases that are available on our website. It bothers me to no end that some companies bury their guidance in webcast comments. That should not be allowed. Finally, our company is extremely forthcoming with disclosing a consistent set of financial metrics in our earnings press releases -quarter after quarter. And these metrics are, of course, included in our press releases located on our website. So investors know right where to turn to find this information quickly. Panelist #6: Since [company name deleted for confidentiality] has pretty much been ahead of the curve on the whole disclosure and governance issue I will fill in what we were already doing, pre-Sarbanes-Oxley. [Company name deleted for confidentiality] has always had a predominantly independent Board, from the very beginning of our Corporate Web site, in 1997, we have had available financial data, press releases, on-line annual reports, information on our various shareholder meetings and earnings release timing announcements. We were web-casting quarterly earnings calls before the SEC so required. In a nut shell, we have always been a very forthright organization. It goes hand in hand with the extremely entrepreneurial nature of the Company.

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54 Since the site first went live Web site financial request contact submissions have come directly to the attention of the Company’s Director of Corporate Communications and Investor Relations and are responded to promptly. That is not to say that we have not taken some very positive additional actions to increase our corporate transparency. We have contracted with Ethics-Point and have their contact information on our Home page, so that any one wishing to report suspected improper or unethical conduct of any employee of [company name deleted for confidentiality], or any of its subsidiaries may do so on a confidential, anonymous, basis. We now web cast our shareholder meetings, as well as quarterly earnings calls and other meetings where sensitive material could be discussed. Additionally, through the Investor Relations page on the Company site, which is maintained by CCBN, interested persons have easy access to all SEC filings, as well as the replays of past web casts, historic press releases and virtually any other financial information that they may want. Panelist #7: [Company name deleted for confidentiality] realizes and recognizes that the Company’s investor relations website is a primary source of information for investors. We pay close attention to and measure the effectiveness of our online communications. We believe shareholder confidence is paramount. The following items detail several ways we use our IR website to build financial accountability and ensure transparency: Quarterly Reporting: Our website traffic is usually highest around the Company’s quarterly announcement. We post our quarterly release in PDF format, which is easier for investors to download and read. Our earnings releases are to-the-point and contain key metrics that are important value drivers of the Company. We plan to augment our disclosure to further enhance the understanding of our business model. This is primarily driven by feedback we have received from the investment community as well as our desire to provide metrics that will help investors value the strength of our business model. We also post all of the Company’s webcasts – quarterly earnings announcements, shareholder meeting and investor conferences – on the IR page. These events remain available for all website users for several months. IR presentations can also be found on our website. Development of a Corporate Governance Sections: o We post the stock transactions of the top five executives on with in three business days on our website. We also provide additional color regarding the nature of the transaction, particularly the percentage of their holdings the transaction represented. o Code of Conduct and Ethics o Corporate Governance Guidelines o Audit Committee Charter and members

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55 o Governance Committee Charter and members o Compensation Committee Charter and members o Nominating Committee Charter and members o Several of these items we began prior to Sarbanes-Oxley. SEC Filings: All SEC filings and financial statements are posted on the website the day they are filed. Moreover, the MD&A is written in clear concise language that is not only responsive to the technical requirements but it explains management’s view of the implications and significance of that information. We include all relevant and up-to-date financial and non-financial information. All SEC documents are available on our website and investors can enroll to receive email alerts whenever the Company files an SEC document. A glossary of financial terms and calculations is included on the IR page to help the reader who may not be familiar with finance terms and jargon. All accounting and/or proposed rule changes that could impact our business are disclosed. The Company further addresses these issues on conference calls and in SEC disclosures. The potential financial impact is included in the discussion. Panelist #8: I know it's not what everyone wants to hear, but I don't think this is really happening and, if it is, it's not happening in quite the way that the question suggests. The increased demands for transparency are not driving or even being considered by the people who work on web sites. The web sites are driven by a bunch of IT technicians and communications functionaries. They are simply executing on orders that have been in place for a number of years. In many cases, the hard thinking is done by outside firms CCBN is one that set up templates that each company individualizes (and, if something isn't in the template, it's not on the web site meanwhile, everyone has a "corporate profile" on their web site because that's in the template). We've tried with a few clients to step up the quality of disclosure on the web sites. We've tried, for example, to put more information up on the site that's analytic or that helps provide the information needed for analysis. Frankly, though, anyone with a Bloomberg terminal has access to better data and data that's trimmed the way you like it. In one case, in particular, where we've tried repeatedly to improve the quality of the offering on the web site, we've been frustrated by two forces: first, the client moves like a snail, its committees impede action and in any case it's hard to get them to do much of anything that's different from what they did yesterday; and, second, this client has budget limitations that have essentially put the web site team in a "maintenance" mode (in other words, there's no money for improvements, even if they could get their act together to execute the new ideas).

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56 With another client, on the other hand, we are proposing to use the web site to good advantage and the client is on board and is likely to let us proceed. This is the [company name deleted for confidentiality] company that has [a negative reputation]. In this case, we're going to put up on the web site a much more detailed and robust discussion of the company's ethical and legal compliance function and initiatives this is a company that's done a lot to try to clean up a business that has historically been notoriously corrupt [further information deleted for confidentiality]. Our intent is to tell the company's story in advance of the crisis hitting and, when people start to notice the company, the corporate spokesperson will point to the web site and say, "see, we've been saying all along that this is a problem, and look at what we're doing to make sure this never happens again to us and our people." In this case, we're able to make changes to the web site because the staff is focused on a huge problem that it must solve; because the staff of this big company is very small and small teams tend to get more done to web sites than large teams; and because the budget for web design and changes is very very small in the context of this very large company. I cannot recall anyone asking in the past two years to look at their web site. I've made recommendations on web sites to a few clients because those web sites were either truly awful or the clients needed to take certain kinds of actions and the web site offered tools that promised some useful functions or features. With respect to transparency, the focus of everything that's interesting has been the SEC filings. Of course, these are filed on the web, but that's not exactly a web site program, now is it? Panelist #9: The use of the web to provide information to investors has evolved over the years since I began in investor relations in 1998. Regulations – such as Regulation FD and Regulation G – have driven expansion as well as a general increase in the use of the Internet. Our website is used as a tool to provide greater transparency and accountability to the investment community. The website is primarily used by retail (individual) investors who don't typically have the opportunity to participate in one-on-one conversations with company management. All formal communications both written and oral are posted to our website. This includes: Earnings and other press releases Earnings conference call audio files (participation conference calls are restricted to institutional investors and sell-side analysts but are simultaneously webcast) Institutional conferences audio files and accompanying PowerPoint presentations Institutional investor PowerPoint presentations (that we use for one-on-one meetings) Annual report and SEC filings

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57 All audio files are left on the site for approximately 60 days from the date of the event. Information becomes stale (not relevant based on changes in the business). The SEC wants such information left up for one year but our legal council suggests 60 days. A supplemental information section in our website provides reconciliations of non-GAAP and GAAP measures that are used in our earnings conference calls and institutional conferences/investor presentations in accordance with Regulation G. (Non-GAAP information in the earnings press release are reconciled to the nearest GAAP measure in the release.) Our supplemental information section also contains historical financial information that may be useful (e.g., revised historical financial statements with divested product lines reflected as discontinued operations). We have also included corporate governance information in accordance with Sarbanes-Oxley to provide insight into our governance practices. This includes our corporate governance guidelines, board committee charters (governance, audit and compensation) and our company standards of conduct. Our experience has been that mostly retain investors use our website. Our institutional ownership is approximately 75%, and institutional investors typically either utilize a service (e.g., StreetEvents) where all they can track all the companies they follow in one place or prefer personal communication. We will point institutional investors to our website for items such as the latest investor presentation and revised historical information. All the items discussed above are contained in the investor section of our website. Some institutional investors will use the non-investor sections of the website to learn more about the offerings of the company.

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APPENDIX J SECONDARY QUESTIONING RESPONSES Panelist #1 1. What does transparency mean, then? Is it another term for regulatory compliance or does it go beyond that? As well described by one of the other panelists, transparency means different things to different people. However, I believe transparency is comprised of four elements. First, access to information. This means access to the same information by all stakeholders. If a company limits information to one class of individuals/investors, but not another (i.e., institutional vs. retail, or buyside vs. sellside), there is incomplete transparency. Second, the quantity of information. If a company only provides limited, or just the required, information, there is not as much transparency. Third, the quality of the information. If a company provides analytical information as well as just numbers, provides insight to industry trends and other information that paints a clearer picture, then transparency is improved. And fourth, the information must be timely. Old news is no news. Looking at it from "the other side of the glass", i.e., the investor's viewpoint, the investor wants to know, and feels he is entitled to know, what the company knows, when the company knows it. That is his definition. This is a far stretch from the materiality requirements for disclosure that existed just a few years ago and to which many companies still cling. 2. Could too much disclosure be a detriment to this relationship? If so, where should the line be drawn? In any relationship, too much information can be detrimental. Consider the proverbial husband who is asked by his wife if the dress she is wearing makes her look fat. Where the line is drawn in the investor/company relationship is, and will continue to be, an ongoing struggle. Investors want to know everything. Companies are reticent to divulge negative information, particularly trends that may be temporary, as well as trade secrets, pending negotiations and most of the day-to-day product of running a company. The problem is, the line is no longer drawn. The "materiality line" gave companies a measure by which they could judge the need or advisability to disclose information. That line has shifted to "what an average investor would want to know when making an investment decision." It has gone from an objective measurement to a purely subjective one. 3. How can these obstacles be overcome? Until senior management of a company embraces the fact that corporate IR websites are the most effective and efficient tool of meeting their disclosure obligations, those 58

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59 objections will continue to rise. Management should, but often doesn't, understand that the Web presence is a TOOL. Management, not the IT department or the webmaster, will be held accountable by shareholders for the CONTENT and accessibility of the information on the site. Putting it in personal liability terms often brings home that message. Panelist #2 1. What does transparency mean, then? Is it another term for regulatory compliance or does it go beyond that? Transparency is a state of mind, a corporate value, a code of conduct. It is not an absolute concept, (present or not present), but rather exists along a continuum. Different levels of transparency are reflected at every company. What the SEC, NYSE, NASDAQ, and other regulatory bodies are trying to define are minimum standards of transparency that all companies should meet. Corporate managements and Boards of Directors reveal a great deal about their own character by how much they resist or embrace the defined minimums and to what degree and on what issues they go beyond the minimum. 2. Could too much disclosure be a detriment to this relationship? If so, where should the line be drawn? I suppose “too much” disclosure could occur if (1) competitive information was revealed, leaving the company vulnerable to rivals’ reactions, or (2) so much minutia was disclosed that investors were unable to discern the primary financial drivers of the company. Deciding what the appropriate level of disclosure should be, within the letter and spirit of regulatory requirements, is an often-under-appreciated skill of executive management. Investors want to have shared with them enough information on which to make an informed investment decision, but no so much that the company weakens its competitive advantage. They also want the information to be presented concisely, with focus and appropriate emphasis on the things that really matter. These are qualities that corporate management is in the best position to discern as they should reflect the metrics on which management focuses to run the business. 3. How can these obstacles be overcome? A good IR practitioner/counselor knows they won’t ever achieve 100% “best practices”, but they should maintain a gentle, diplomatic persistence toward them. Objections of legal counsel can often, but not always, be overcome by presenting examples of other companies’ practices that conform to, or are more similar to, the desired practice. The other obstacles (budget, IT, time) seem rather weak excuses to me in regards to minimum disclosure/transparency guidelines. If IR is running into those obstacles, the issue needs to be escalated to senior management and senior management needs to support IR, thereby reinforcing the company’s Transparency Values. Being a publicly-traded company brings with it a certain minimum cost of compliance/transparency. Hopefully, that cost is more than outweighed by the benefits of a lower cost of capital, ability to attract better talent, increased visibility, etc.

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60 Beyond the minimum disclosure requirements, budget and time constraints are a fact of corporate life. IR practitioners need to be able to prioritize their wish list and know how to negotiate toward compromises on the most important. Also, it’s important to remember that a corporate website is just one tool with which to accomplish the desired level of transparency. If the IT department will not support certain functionality, some other media might be an option. However, whatever media is chosen must be able to satisfy the requirements of RegFD in regards to ensuring investors equal access to any material information. Panelist #3 No response returned. Panelist #4 1. What does transparency mean, then? Is it another term for regulatory compliance or does it go beyond that? I firmly believe that transparency is not just a term for regulatory compliance but that it is to a certain extent like pornography: You know it when you see it. You know if a company is being "transparent" by the thoroughness and forthrightness of their financial statements, but also of their qualitative statements. If a savvy investor reads enough annual reports and/or SEC filings, they will soon discern those companies who are forthright, from those who are less than. Transparency is defined somewhat by the regulatory agencies but should go beyond their definition. It an effort to, in a clear and substantive manner, provide the owners of a public company with the necessary information that they require so that they can make accurate investment decisions. After all, the real "bosses" of a public company are the investors. 2. Could too much disclosure be a detriment to this relationship? If so, where should the line be drawn? A company has to function in the most efficient and beneficial (for the long-term) manner possible. There is an old saying about "too many cooks in the kitchen spoiling the broth." To a certain extent this is the same. Some information should not be disclosed because it either 1) poses a competitive or other business risk to the organization and/or 2) would raise issues and create angst with shareholders who do not have the skills and/or in some instances comprehension to understand the disclosure appropriately. For example, disclosing all of the details around a drug in a clinical trial may have detrimental impact on the very patients that it is trying to serve (by providing misleading or confusion information without context), may compromise the company's competitive situation and/or provide "short-sellers" with more information to misinterpret and perpetuate. Companies need to decide what information is appropriate to disclose and what is not, to maintain their business and competitive performance. 3. How can these obstacles be overcome?

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61 I really don't confront these obstacles and haven't for quite some time. However, I believe it comes down to showing value. This can be done quantitatively as well as qualitatively # hits on the IR site, leveraging e-business initiatives within the company, providing customers access to information to firm up a relationship. Panelist #5 1. What does transparency mean, then? Is it another term for regulatory compliance or does it go beyond that? Transparency means, at least in one interpretation, providing the information to investors in an easy to find manner. Sure, legally companies can bury their financial guidance in their conference call comments. But the right thing to do is to put the guidance in the press release, posted on your webpage -so as to not make investors look for it. By the same token, having a separate link to insider filings on IR webpages makes it that much easier for investors to find information that is important to them (on insider sales). Not required, but a good idea. 2. Could too much disclosure be a detriment to this relationship? If so, where should the line be drawn? I definitely think disclosure on a corporate web site benefits the relationship between the investor and the Company. However, it is important to determine which operating information (such as non-financial metrics for example) is most relevant to investor decision making. So, in some cases, the goal should not be to disclose everything possible, but rather to disclose the type of information that best aids investor decision making. And this information should be disclosed consistently as always. 3. How can these obstacles be overcome? Time constraints are the fact of life in our profession (IR). I strongly believe IR folks need to outsource the IR website to get around the internal IT bureacracy. Vendors will update things much faster than the overworked internal people who are more responsive to sales that IR all day long, at least in my company. Panelist #6 1. What does transparency mean, then? Is it another term for regulatory compliance or does it go beyond that? Transparency, in my opinion, should mean much more than simply responding to governmental regulation. It should be, in fact, the act of providing the company’s investors, and other interested parties, the ability to fully and clearly understand the financial workings of the company and to provide the information they need in order to fully analyze the organization in an on-going manner. In a nut shell it is the company opening itself to full and unfettered review at all levels. It is operating in an honest and ethical manner.

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62 2. Could too much disclosure be a detriment to this relationship? If so, where should the line be drawn? I do not think a company can provide too much information. It is important that all information be properly explained, so that individuals know what the information means. If any line is drawn it would be in the area of the possible impact of pending legal action, which may or may not be decided for or against the organization, and could cause individuals to react negatively based on mere innuendo. 3. How can these obstacles be overcome? There will always be issues of web site ownership, questions from legal as to how information should be displayed or worded and budgets, must of necessity, be considered. However, if management understands the value of providing a transparent image and all concerned management members take the time to work together, then the challenges can be dealt with in a manner that makes everyone a winner. It just requires that senior management buy into the concept and fully support and direct the necessary actions to make it work. Panelist #7 1. What does transparency mean, then? Is it another term for regulatory compliance or does it go beyond that? Information availability is a key factor in market efficiency. The kind of information provided to the investment community and how it is made available define corporate transparency. Components of transparency include financial disclosure, timeliness of the disclosure and audit quality of financial disclosure. I believe transparency is an extension of regulations, whose goal is to ensure companies provide the investment community with sufficient information to make an investment decision. 2. Could too much disclosure be a detriment to this relationship? If so, where should the line be drawn? Yes too much disclosure may be a detriment. A clearly defined line must be established by the company regarding the level of information it will disclose. More importantly, the company must discuss its results in the terms of the metrics ...they need to be in the proper context. Also, as the company evolves and/or matures the type of information disclosed may change. The level and type of disclosure may differ depending on the company's industry and sector. The IR team in conjunction with the CEO, COO and CFO, decide what metrics and information will be disclosed...is it important in evaluating our business model? We strive to provide the investment community with the necessary information to evaluate the strength of our business model and from time to time we may add to the level of our current disclosure.

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63 3. How can these obstacles be overcome? One way in which you can overcome these obstacles is to ensure all stakeholders understand the importance of having a well-branded and organized website. Additionally, I have been able to demonstrate to each stakeholder the benefits of having a website...what's in it for them. Panelist #8 1. What does transparency mean, then? Is it another term for regulatory compliance or does it go beyond that? “Transparency” has emerged as one of those slang words that, well, needs a more transparent definition. The great thing about a word that is ill defined is that everyone can be in favor of it. I, for one, love only motherhood more than transparency. What “transparency” ought to mean, in the practice of investor relations, is the presentation of information that enables readers to understand and clearly see the key elements of a company’s economic position and business plan so they can make reasonable assessments of the enterprise’s future outlook. Transparency does not mean “full disclosure” – quite the contrary: one of my clients, in a business similar to Enron’s, responded to market events and new regulations with a 10-K of 3,600 pages – in fact, “full disclosure” helped undermine transparency. Transparency also does not mean, necessarily, being responsive to investors – one of my clients, a big Internet player, had an IR person who was committed to being responsive to investor inquiries, and she worked hard to help callers (she had a de facto “frequent callers’ club,” which in my view coincided to the “frequent traders’ club.”) understand each of the small changes in the market and the stock – in fact, this “full disclosure” helped make this stock one of the most volatile in the S&P Mid-Cap 400 Index, and the risk created by this trading volatility helped to erode the value of the investment for the long-term holders. And, finally, transparency does not, necessary, mean giving detailed forecasts of future outlook – one of our clients tries to spell out, in great detail and with as narrow a range as possible, the earnings outlooks for coming quarters – in fact, the company cannot manage its business as closely as it can issue forecasts, and it frequently misses its estimates on either the high or low side, and the resulting unpredictability has created a volatile stock despite a very stable and steady underlying business, again adding to the risk that surely is being discounted in the value of the stock held by long-term investors. Transparency ought to go beyond regulatory compliance. Managements should disclose, in a clear way, the financial results and the accounting issues can affect those results (if you’re in the software business and don’t discuss, in your MD&A [Management Disclosure and Analysis], revenue recognition policies and practices and trends, then you’re not transparent enough) – but the law says all that, so this is no longer at issue, now is it? What is voluntary, still, is the business of trying to explain the company’s competitive position, its business plan, its strategies for growth, its markets and marketplace trends, its threats and opportunities, its capital resources and needs – I once

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64 worked with a guy who really knocked himself out on a big road show (this was back in the early 1980s) to European investors; when they finished in Zurich, one of the leading figures in the room pulled aside my friend and said, “you really didn’t have to go to so much trouble with all that information – all we wanted to know is whether you’re in the right businesses and whether you’re the right people to run the businesses.’” You see: transparency is in the eyes of the beholder 2. Could too much disclosure be a detriment to this relationship? If so, where should the line be drawn? I find this question to contain a premise that is open to dispute – Web sites, in my view, are at best neutral in “building financial accountability.” First, the primary sources of financial information is the SEC filing, and institutional investors who are decisive in setting prices for a stock are likely to be getting their information from those sources or derivative sources (Bloomberg’s data, for example); for the people who act as “lead steer” investors, I have trouble imagining the corporate web site is a primary resource tool, particularly for financial data and disclosures. Remember, most institutional investors own dozens if not hundreds of stocks, and efficiency alone dictates they get their financial information from a limited number of sources, probably third-party sources, and that this data be viewed in a consistent format (hence, portfolio decision makers are most likely to be looking not at corporate web sites, each of which is unique – they are most likely to rely on downloads from Bloomberg, for example, or presentations by their analysts). The web site is, at best, a secondary tool for these investors – just as it’s probably a secondary tool for retail investors (I’d guess that a well-known stock commentator on TV moves more stock to retail investors than any corporate web site). Now, on to the question of too much disclosure. This can be a real issue – but there’s a fine line to walk. Obviously, hiding stuff is against the law, and even if it weren’t, the fact would remain that this hurts both investors and, ultimately, the stock issuers. Obviously, a 3,600-page 10K obscures the real questions – everyone ought to be able to tell a clear story in 30 pages (sure, everyone needs back up and supporting details, but top-notch portfolio managers and investment bankers usually can tell a complete corporate story in a few hundred words, so why do we need more than 30 pages?). Here are two examples of the dangers created by either excessive or unclear disclosure: large numbers of data points, including some that are barely relevant, with frequent changes in the movement of each one, can fuel volatility and make stock’s price more risky and therefore less valuable (and for investors who don’t follow the frequent changes, this kind of disclosure pattern can penalize some investors and can limit the market for a stock); companies can create barriers to entry for some investors with disclosures that have either too much detail or that lack relevant facts (companies limit the market for their stock if they create situations in which only specialists can understand the business or the disclosures – as is the case in some biotechs and tech stocks – or if it takes days to read all of the “stuff” – as is the case with big and complex companies, merchant electricity generators and traders are but one example).

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65 We’re of the view that CEOs, when they speak to Wall Street, should limit their prepared remarks to 15 minutes, and they should touch on 3 or so topics that are important now (one of which relates to growth strategies) – and then get into Q&A with investors. If there are details that a company wants to convey, fine and dandy: dump it onto the web site (we’re seeing the web site as a living appendix rather than a primary source, to be honest). We’re of the impression that, 20 years ago, investors used to attend CEO presentations and scribble books of notes – now they sit and listen and watch: they’ve got all the data at the office, downloaded just the way they like it (and maybe they even get some from the web site) so they can take the measure of the executive and the business plan rather than trying to sort out the recent balance sheet changes in property, plant and equipment (could you give me a break?). Most web sites don’t offer this kind of insight, which is only one reason investors still go to brokerage conferences. 3. How can these obstacles be overcome? Again, I’m not sure I would go so far as to say web sites build “financial accountability.” Rather, I think this is, in essence, a “hygiene factor” – none of us gets positive credit for bathing frequently, but we certainly will face penalties if we don’t. One of the reasons managers, in my view, don’t overcome all of the petty conflicts and barriers involved in creating the perfect web site is that they recognize that this effort is likely to be subject to diminishing marginal returns: the benefits to significant improvement just aren’t seen as being that large. The barriers will melt away once it can be demonstrated that the web site actually will have a positive effect at improving the stock price or the shareholder value. Panelist #9 1. What does transparency mean, then? Is it another term for regulatory compliance or does it go beyond that? Transparency means providing investors with both insight into the financial statements and insight into the manner in which a company is run. Investors need to understand how changes in the business’s operations are reflected in the financial statements. Investors want to put their money in companies that have some degree of predictability to both their earnings and revenue streams. Investors hate surprises. To this end, companies provide both financial and non-financial metrics to aid investors in understanding the business. The latest MD&A [Management Disclosure and Analysis] guidance from the SEC stresses the importance of providing information to the investment community in a manner consistent with how company management views the business. Examples of financial metrics would be operating margins, earnings per share and debt-to-cap ratios. Examples of non-financial metrics would be new bookings (current period new business sold) and net backlog (new business sold but not yet implemented into the revenue stream) – both are indicators as to the company’s penetration in its market space and future revenue growth. The SEC’s latest MD&A [Management Disclosure and Analysis] guidance also stresses analysis. A company must do more than explain that revenue decreased X% in the quarter, they must explain why revenue decreased. This type of transparency – allowing investors to “see” for themselves how events impact the financial statements – helps build financial accountability.

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66 Investing is emotional. Historically, investors have wanted face-to-face meetings with management teams to gauge their “creditability.” In today’s business environment of corporate scandals, investors also want further transparency into how a company is run. They want to understand who is on the board of directors and their involvement in running the business. They want to know that procedures are in place to ensure compliance with laws and regulations (e.g., financial statements are presented in accordance with GAAP, industry regulations (e.g., Medicare in the healthcare industry) are complied with, as well as the new corporate governance standards issued by Congress and the SEC). But, at the end of the day, investors want to be able to trust that the management team will be protecting the best interest of the shareholders in their stewardship of company assets and their communications with the investment community (both of which protect the stock price). Transparency is providing investors with a look “inside” the business – to provide them with an understanding of how the business makes money – both actually and ethically. Consistent communications with the investment community – both in content and in timing – bolsters the creditability of the company’s management team. Institutional investors have access to information about a company from a variety of places (SEC website for filings; StreetEvents and other sites for earnings and events calendars, conference call transcripts; First Call or Multex for sell-side analyst reports; Bloomberg terminals for latest news and financial ratios; customer references and trade publications for insight into marketplace). Institutional investors come to the company for ‘color’ on everything they’ve read and heard. They come to the company to ‘check out the horse’ before placing their bet. A company’s website can help with this but it is the content of the company’s communications that are the overriding factor in how successful the attempt at transparency is. 2. Could too much disclosure be a detriment to this relationship? If so, where should the line be drawn? Once something is disclosed, it must always be disclosed or investors assume that something is wrong. A company must be careful in determining what financial and non-financial information will be the most beneficial to investors and what information the company will be consistently comfortable disclosing. For example, some information may be detrimental from a competitive standpoint and therefore a company may not want to disclose. Some information may not be predictable and therefore may cause uncertainty in the investment community if it could not be reliably forecasted. So, I don’t believe it is a matter of “too much disclose.” It is a matter of determining what is the appropriate disclosure to provide insight into the business for investors. 3. How can these obstacles be overcome? I can only speak from personal experience. I use a combination of CCBN and my corporate webmaster to maintain the investor relations portion of the website. I have found that if I’ve wanted to do things that deviated slightly from CCBN’s templates, they

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67 have been willing to accommodate me (typically this has been having something extra posted to the webcast page). If I need something they cannot accommodate, I have my webmaster create a new page. (The webmaster is part of my corporate communications group so I don’t have a resource issue.) Regarding objections from legal counsel, it is hard to find a balance between the attorneys’ need for conservatism and the pragmatic needs of communicating with the investment community. I have found that there is a two-way education process that needs to take place so that both sides understand the needs of the other. Then, an answer that works for both parties can usually be agreed on. Frankly, I agree with the attorneys’ concerns on the staleness of information. With the exception of press releases, we do not leave investor presentations – whether they are PowerPoint presentations, audio files or both – on the website indefinitely. They are removed when a newer version is available or 60 days after the event date, whichever is sooner. And, by providing the attorneys with insight into why we want to disclose certain information, they usually will come around. On resource limitations, since it is content that is equally, if not more, important in driving transparency and, thus, financial accountability with the investment community, IROs should be able to come up with solutions that provide the information on the web to investors, even if it is not in the most appealing format. I imagine the budget limitations/time constraints and IT conflicts come from more interesting, innovative functionality that IROs may want to implement. But, having a few pages developed and then information in the form of word documents or pdf’s posted to them in a timely manner should not be an overwhelming obstacle.

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LIST OF REFERENCES Aldoory, Linda. (2001). Making Health Communications Meaningful for Women: Factors that Influence Involvement. Journal of Public Relations Research 13 (2), 163-185. Bloom, J. (2002, July 22). It is Undeniable that Investors are Losing Faith in Big Business. Jonah Bloom Asks What PR Can Do to Help Restore Public Confidence. PRWeek, 12. Bowles, Nick. (1999, July 28). The Delphi Technique. Nursing Standard 13 (45), 32-36. Bramwell, Lillian and Elaine Hykawy. (1999, March). The Delphi Technique: A Possible Tool for Predicting Future Events in Nursing Education. Canadian Journal of Nursing Research 30 (4), 47-58. “Bridging the Communication Gap.” (2002, October 16). Investor Digest . Bryman, Alan. (2001). Qualitative Data Analysis with SPSS Release 10 for Windows: A Guide for Social Scientists. Oxford University Press, Oxford. Cameron, Glen T, Fritz Cropp, & Bryan H. Reber. (2000). Getting Past Platitudes: Factors Limiting Accommodation in Public Relations. Journal of Communication Management 5 (3), 242-261. Cancel, Amanda E, Glen T. Cameron, Lynne M. Sallot, and Michael A. Mitrook. (1997). It Depends: A Contingency Theory of Accommodation in Public Relations. Journal of Public Relations Research 9 (1), 31-63. Cancel, Amanda E., Michael A. Mitrook, and Glen T. Cameron. (1999). Testing the Contingency Theory of Accommodation in Public Relations. Public Relations Review 25 (2), 171-197. Clayton, M.J. (1997). Delphi: A Technique to Harness Expert Opinion for Critical Decision-Making Tasks in Education. Educational Psychology, 17, 273-287. “Convergence of Investor Relations and Corporate Communication.” (2002, July 15). PR News 58 (27), 27. Cutlip, Scott M, Allen H. Center, & Glen M. Broom. (2000). Effective Public Relations . (pp. 6-7). Prentice Hall: Upper Saddle River, New Jersey. 68

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69 Dalkey, Norman and Olaf Helmer. (1963, April). An Experimental Application of the Delphi Method to the Use of Experts. Management Science 9 (3), 458-468. Daymon, Christine and Immy Holloway. (2002). Qualitative Research Methods in Public Relations and Marketing Communications . New York: Routledge. “Delphi Technique: A.” (2003). Cornell University. Retrieved January 14, 2004, from http://www.cce.cornell.edu/admin/program/documents/delphi.htm “Delphi Technique: B.” (1994, October 1). Michigan State University. Retrieved November 9, 2003, from http://www.msue.msu.edu/msue/imp/modii/iii00006.html “Difficult Market Conditions Force IR and PR to Work Together.” (2002, December 16). Investor Relations Business 7 (24), 4. Diorio, Stephen. (2002). Internet Communications Could Double Size of U.S. Public Relations Industry. IMT Strategies. Retrieved March 13, 2002, from http://www.imtstrategies.com/wn_press_release_prstudy.htm Dunham, Randall B. (1996, November, 5). The Delphi Technique . Retrieved April 10, 2003, from http://instruction.bus.wisc.edu/obkemo/readings/delphi.htm Dupuy, William. (2002, March 6). SEC Dictum Spells Opportunity for Communications Professionals. InternetPRGuide. Retrieved June 14, 2003, from http://www.internetprguide.com/pr_insight Esrock, Stuart L. and Greg B. Leichty. (2000). Organization of Corporate Web Pages: Publics and Functions. Public Relations Review, 26 (3), 327-344. Glaser, B.G. and A. L. Strauss. (1967). The Discovery of Grounded Theory . Chicago: Aldine Publishing Co. Granat, Peter. (2002, January 31). PR.com” The Boon and the Burden of the Internet to the PR Industry. InternetPRGuide. Retrieved June 14, 2003, from http://www.internetprguide.com/pr_insight.html Grunig, J.E. and Larissa A. Grunig. (1992). Models of Public Relations and Communication. In James E. Grunig (Ed), Excellence in Public Relations and Communication Management. (pp. 285-325). New Jersey: Lawrence Erlbaum Associates. Guba, Egon G. and Yvonna S. Lincoln. (1985). Naturalistic Inquiry . Beverly Hills: Sage Publications. Gupta, Uma and Robert Clarke. (1996). Theory and Applications of the Delphi Technique: A Bibliography (1975-1994). Technological Forecasting and Social Change, 53 (2), 185-211.

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70 Hameon, F.A.M. (1998). Combination Carriers and a Dedicated Air Cargo Hub-and-Spoke Network: A Future Investigation in the Possibilities to Develop and Maintain a Dedicated Air Cargo Hub-and-Spoke Network. The International Air Cargo Association. Retrieved February 17, 2004, from http://www.tiaca.org.content.hameon4.asp (2004, February 17). Hasson, Felicity, Sinead Keeney, and Hugh McKenna. (2000) Research Guidelines for the Delphi Survey Technique. Journal of Advanced Nursing 32 (4), 1008-1016. “IR and PR Must Work Together: Consolidated Communications Helps Win Back Investors’ Confidence.” (2002, October 7). Investor Relations Business 7 (19), 1. Kreber, Carolin. (2001). The Scholarship of Teaching: A Comparison of Perceptions of Experts and Regular Faculty. Higher Education Resource Hub. Retrieved February 19, 2004, from http://www.higher-ed.org/AERA/2001/Kreber.htm Lesly, P. (1986). Multiple Measurements of Public Relations. Public Relations Review 12 (2), 3-8. Linstone, H.A. and M. Turoff, eds. (1975). The Delphi Method Techniques & Applications. Reading, MA: Addison-Wesley Publishing Co. McCartney, Laton. (2003, June 25). IR: Web to the Rescue? Eager to be More Transparent, Companies are Using a Range of Technologies to Communicate with Shareholders. CFO.com Retrieved June 30, 2003, from http://www.cfo.com/printarticle/0,5317,9750M,00html McKenna, H.P. (1994). The Delphi Technique: A Worthwhile Research Approach for Nursing? Journal of Advanced Nursing 19 (6), 1221-1225. McKinnon, Lori Melton, John C. Tedesco, and Tracy Lauder. (2001) Political Power through Public Relations. In Robert L. Heath (Ed), Handbook of Public Relations. (pp. 557-563). Thousand Oaks, CA: Sage Publications, Inc. Nehiley, James N. (n.d). How to Conduct a Delphi Study. Retrieved January 14, 2004, from http://extmarket.ifas.ufl.edu/FOCUS.html NIRI: A. “NIRI Missions and Goals.” Retrieved March 28, 2003, from http://www.niri.org/about/index.cfm NIRI: B. (2002, October). “An Analysis of Trends and Technology in the Practice of Investor Relations.” Retrieved February 19, 2004, from http://www.niri.org/gateways/surveys/Trends02.cfm “Portfolio Managers Cite Web-Based Communications as Crucial Component of Investor Relations.” (2004, January 23). CCBN. Retrieved March 8, 2004, from http://www.ccbn.com/news/news_releases.asp

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71 “Putting the PR into the IR.” (2002, November 15). Investor Digest . Radner, Greg. (2002). Sarbanes-Oxley Act Shines Spotlight on Web-Based Disclosure. Strategic Investor Relations, 62-64. “Securities Class Action Filings.” (2001). Stanford University . Retrieved March 24, 2003, from http://securities.stanford.edu/companies.html Sievers, Leanne. (2003, May 19). Utilizing the Web for Corporate Governance Compliance. Electronic News. Retrieved June 9, 2003, from Lexis Nexis Web site: http://www.lexis-nexis.com “Sites Unsound.” (2003, February 6). New Media Age . Retrieved June 8, 2003, from http://80-web.lexis-nexis.com Springston, J.K. (2001). Public relations and new media technology: The impact of the Internet. In R.L. Heath (Ed.), Handbook of Public Relations (pp.603-614). Thousand Oaks, CA: Sage Publications. “Survey Finds Vast Disparity in Online Transparency.” (2003, January 21). APCO Worldwide . Retrieved June 8, 2003, from http://www.apcoworldwide.com/content/newsroom/press_releases/03_01_21.cfm Thompson, L.M. (2002, December 4). Managing Transparency: The IRO’s Role in Opening the Gates.” Speech presented to the South Florida NIRI Chapter. Retrieved March 28, 2003, from http://www.niri.org/MediaCenter/speeches/Manading Disclosures20021204.pdf “USA Tops 160M Internet Users.” (2002, December 16). Computer Industry Almanac. Retrieved September 16, 2003, from http://www.c-i-a.com/pr1202.htm “Use of Expert Panels in Developing Land Use Forecasts.” (2003, March 6). U.S. Department of Transportation. Retrieved February 17, 2004, from http://www.tmip.tamu.edu/clearinghouse/docs/landuse/expert_panels/observations.stm “Using Delphi Technique in Assessing Needs for VTET.” (2004). Regional Center for Vocational and Technical Education and Training. Retrieved January 16, 2004, from http://www.voctech.org.bn/virtual_lib/Programme/Regular/Emerging99/Using%20Delphi%20Technique.htm van Zoonen, L. (1994). Feminist Media Studies. Thousand Oaks, CA: Sage. Vercic, Dejan. (2001). On the Definition of Public Relations: A European View. Public Relations Review 27 (4), 373-388.

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72 Wakefield, Robert I. (2000). Preliminary Delphi Research on International Public Relations Programming. In Moss, Danny, Dejan Vercic, and Gary Warnaby (Eds.), Perspectives on Public Relations Research (pp. 179-208). New York: Routledge. Walker, Louise. (2000). The Required Role of the Psychiatric-Mental Health Nurse in Primary Health-Care: An Augmented Delphi Study. Nursing Inquiry 7 (2), 91-102. White, Candace. (2000). Public Relations Practitioners’ Perception of the World Wide Web as a Communications Tool. Public Relations Review 26 (1), 31-51. “Whose IR Info is on Your Web Site?” (2000, July 1). Le File . Retrieved June 13, 2003, from http://www.lefile.com/articles/irnotes/07012000.htm Wrigley, Brenda J. (2002). Glass Ceiling? What Glass Ceiling? A Qualitative Study of How Women View the Glass Ceiling in Public Relations and Communications Management. Journal of Public Relations Research 14 (1), 27-55.

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BIOGRAPHICAL SKETCH Nadine Marie Weber was born in Pennsylvania. She lived in Pittsburgh for the first six years of her life. In 1985, she and her family moved to Coral Springs, Florida where she spent the next eight years of her life. In 1994, she and her family moved to Denver, Colorado. Three years later, they moved to Ft. Collins, Colorado where she graduated with honors, from Ft. Collins High School in May 1997. She moved to Gainesville, Florida, that same year to attend the University of Florida. Nadine received a Bachelor of Science degree in sociology and a minor in criminology, from UF in May 2001, and she graduated with honors. She continued her education at UF, where she studied public relations. She received her Master of Arts in Mass Communication degree from UF in May 2004. 73